Just about a year ago, the world braced itself for some unknown virus that was slowly disrupting the world as we knew it.

People who were feeling ill were being isolated and tested, businesses and offices began to send employees home until the situation was “under control,” and the National Basketball Association suspended play as its first player tested positive during live play. WHO had just declared Covid-19 a pandemic— at that point, the world knew it may be dealing with something it hadn’t seen in this lifetime. 

Now, the world is hopefully headed in a positive direction. Vaccines appear to be rolling out at a successful pace in some areas, and infection rates, hospitalizations, and death rates seem to be getting better during this process. 

As more of the population begins to accept the available vaccines, we’ll know more about the economic recovery, as well. Will the public follow procedures long enough to allow the progress made with vaccinations to work? Will the early reopening of certain states hurt the entire U.S. economy and recovery? Will spring break travel stall the positive data we’re receiving thus far as these potential super-spreader events take place? All of these unknowns will be answered over the next few months.

As for cocoa, a global economic recovery and reopening of businesses and events can only help the market. A soft commodity like cocoa is heavily reliant on demand, and demand for cocoa has slowed as people have changed their routines and purchasing habits. 

Some of the fundamentals for cocoa have stayed steady. Production concerns could help to stabilize prices and, with a little assistance from the demand side of the equation, May cocoa prices should head back above 2650. 

May Cocoa Daily Chart

Source: Tradingview

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