Cocoa futures in the May contract settled last Friday in New York at 2472 while currently trading at 2450, down slightly for the week still stuck in an 8-week consolidation pattern looking to break out on some from fresh fundamental news.
Fundamentally speaking, the concern that global cocoa demand will remain weak despite the Ivory Coast government's action to cut prices to boost sales.
Global chocolate demand concerns are negative for cocoa prices. Concerns have increased that Valentine's Day chocolate sales could fall from last year as tighter social distancing rules from the Covid pandemic delay a recovery in chocolate demand.
Cocoa prices are trading slightly below their 20 and 100-day moving average as the trend has turned to the downside. I think prices are just digesting the massive run up in price that we witnessed in November. Cocoa and coffee are the weakest commodities unable to join the rest of the agricultural markets to the upside, so be patient and wait for a trend to develop as trading in a choppy market is extremely difficult over time, so sit on the sidelines.
CHART STRUCTURE: SOLID
S&P 500 Futures
The S&P 500 in the March contract is currently trading lower by 4 points at 3908 after settling last Friday in Chicago at 3880, continuing its bullish momentum. This is a strong demand market as investors continue to put money into the entire equity market, especially the Nasdaq-100, which is at an all-time high once again. Continue reading "Will Valentine's Day Spoil Cocoa Futures?"