Breakfast Report - Cocoa Sugar Coffee OJ

“Actionable Trading Ideas that help you stay ahead of the markets”

Cocoa (May)

Fundamentals: The market continues to see bullish fundamentals in the background while the effective washout in the outside markets has taken its toll on cocoa. I believe cocoa and sugar are going to have snap back rallies once the dust settles so put them on your radar. The international cocoa association projected global production deficit of 85,000 tonnes for the 2019/2020 season, larger than analyst projections.

Technicals: Cocoa has mild support at 2526 which is the 200 DMA and we were unable to close below that level yesterday. The Trend trading system triggered a short on Feb 28th at 2671 and has a stop close only working at 2709. The first area of resistance is 2605. If you are going to counter trend trade this market use a close below the 200 DMA as your stop out point or stick with long dated call options.

Bias: Bearish/Neutral

Previous Session Bias: Bearish

Resistance: 2622***, 2706****