As Q3 Comes To An End - Are Cocoa Futures Headed Back To 2600?

According to the COT data, the shorts have been exiting their positions
If Ivory Coast moves farmgate price higher, futures’ prices should follow
December contract has a first notice day on 11/15
Cocoa Futures Update

Cocoa Futures Update

Are cocoa futures headed back to 2600?

 

Currently, December cocoa futures are sitting on support. 2455 has held multiple times on the chart and has helped the contract recover back to the 2550-2600 range. Although the market has hit overbought levels, fundamentally we have more room to move higher as we enter Q4.

The December contract has a first notice day on 11/15 and last trading day of 12/13 – so this recent rally could run a little while longer.

In September, cocoa was one of the most positive commodities. According to the COT data, the shorts have been exiting their positions, and longs have been adding to theirs.

If Ivory Coast moves their farmgate price higher, futures’ prices should follow. In the short-term, look at the technicals for support and the fundamentals for help to move prices back to 2600.

If any concern in demand surfaces again, a break lower could occur. Longs should consider buying puts for protection at these levels.

Source: TradingView
Source: Tradingview

If you are interested in discussing the soft commodities further contact pmooses@rjofutures.com . 


 

 

 

About the Author

Peter Mooses is a commodity broker at RJO Futures. He enjoys the analytical aspects of futures trading and appreciates the economic impact that commodities have across all markets.