CJ1! trade ideas
Weekly cocoa market review 12/21/2020.Support us by consulting our free magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed lower at $2,506 a ton. Cocoa prices fell sharply last week from over $2,650 to just $2,500. Even the falling dollar could not provide support for cocoa.
Last week was therefore a weather-oriented market. Indeed, above-average rains combined with sunny periods in most cocoa-growing areas of Ivory Coast should improve the quality and size of beans at the end of the main harvest. Ivory Coast, the world's leading cocoa producer, is in the dry season, which runs from mid-November to March, when rains are normally light and infrequent. Producers welcomed a second consecutive week of good rains, which they say will trigger a new flowering mid-harvest from April to September and also boost the yield of the last stage of the main crop from October to March. Farmers said they expected large volumes of beans to leave the bush until the end of January.
Fears of reduced demand with an ICCO report predicting a surplus in the 2020/21 crop and a crop that looks good explain last week's drop.
For the 2020/21 season, the arrivals in Ivorian ports are 996K tons as of November 22, against 883K tons at the same period the previous season. Cocoa stocks are down to 2908 thousand bags of 60 Kg.
The International Cocoa Organization ICCO has revised down the cocoa surplus to 19,000 tons compared to a previous forecast of 42,000 tons. The ICCO estimated world cocoa production at 4.697 million tonnes, about 27,000 tonnes less than its previous forecast. World cocoa grindings are forecast at 4,631 thousand tonnes, 4 thousand less.
On the international level, the Republican leader of the Senate Mitch McConnell announced Sunday evening that an agreement of 900 billion would have been reached. The Fed said its stock purchases would continue at the current rate of $120 billion per month until substantial additional progress has been made. The brexit saga continues, with the European Parliament's Sunday night deadline for a deal passed, but negotiations will continue. No one seems to want to take responsibility for a possible failure. After Pfizer, the FDA also approved Moderna's vaccine. As far as the pandemic is concerned, the vaccination campaign has started in the United States. The new strain of coronavirus detected in Great Britain worries, it would be 70% more contagious. The global death toll is rising, we have just passed 76 million cases worldwide, with more than 1.692 million deaths. The United States is still the most affected country, with 317,000 deaths and more than 17 million cases.
The Dollar fell last week, with the DXY closing lower at 89.924, hitting a 2 1/2 year low. The long-term trend is still bearish.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average rainfall of more than 150mm. They were more mixed in November. The southern parts of these 2 countries received above normal rainfall and the northern parts were 50mm below normal. Cocoa trees are more affected by rainfall than any other climatic factor. The dry season started in Ivory Coast and Ghana and lasts from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. The wind would already be present in the northern part of the country, which explains why rainfall was already more concentrated in the coastal areas. Last week, the rains were higher than normal.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 2908 against 2967 thousand 60 kg bags last week. ICE US and EU cocoa stocks are above last season's stocks at the same period.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week down to 89.924, hitting a 2 1/2 year low. The long-term trend is still bearish. The possibilities of reaching an agreement on a contingency plan to support the U.S. economy, as well as the possibility of an economic recovery, are expected to continue.
Disappointing economic results weighed on the currency last week. Indeed, U.S. Retail Sales down to -0.9% and Unemployment Claims up to 885K disappointed.
A low dollar is generally favorable for dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The speculative net position on the cocoa futures markets is up this week to 34.575 K instead of 32.379 K.
Weekly cocoa market review 12/14/2020.Support us by consulting our free magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed lower at $2,622 a ton.
Ivory Coast lifts suspension of sustainability programs imposed on industrialist Hershey. Indeed, the U.S. chocolate maker has committed to pay the LID, a premium introduced by Ghana and Ivory Coast to ensure a decent income for producers. This marks a break in the tensions between the two countries and the manufacturer. Cocoa prices fell to 2520 dollars per ton, before recovering over the weekend regaining 100 dollars in 2 sessions. The downward movement seems to be running out of steam between the hopes brought by the vaccine, the vaccination campaigns that will follow, and low ICE stocks.
Cocoa stocks are down to 2967 thousand 60 kg bags.
The International Cocoa Organization ICCO has revised the cocoa surplus downward to 19,000 tons from a previous forecast of 42,000 tons. The ICCO estimated world cocoa production at 4.697 million tonnes, about 27,000 tonnes less than its previous forecast. World cocoa grindings are forecast at 4,631 thousand tonnes, 4 thousand less.
The dry period in West Africa has begun and runs from mid-November to March. Producers fear the arrival of the Harmattan. It is a dusty wind coming from the northeast of the Sahara and which blows during the dry season. The above-normal rainfall last week, however, improves the prospects for the end of the main harvest between January and March, and reassures producers in the more central parts of Ivory Coast, which had received less rain.
Ivory Coast seems to have turned the page on its troubled presidential election, and it is now the turn of its neighbor and world's second largest cocoa producer Ghana. President Nana Akufo-Addo is re-elected, but the opposition rejects the results of a close ballot. Half a million votes separate the incumbent president and his opponent, John Mahama.
Internationally, the ECB has increased its asset repurchase program by $500 billion, the U.S. support plan is still slow in coming, and a brexit no-deal is increasingly likely. The FDA in turn is approving the use of Pfizer's vaccine, and vaccination begins this week in the US. In terms of the pandemic update, we have just surpassed 72 million cases worldwide, with more than 1.607 million deaths. The U.S. is still the most affected country, and will approach and surpass the 300,000 mark in deaths and more than 16 million cases.
The Dollar consolidated last week as the DXY closed higher at 90.976, with the long-term trend still bearish.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average rainfall of more than 150mm. They were more mixed in November. The southern parts of these 2 countries received above normal rainfall and the northern parts were 50mm below normal. Cocoa trees are more affected by rainfall than any other climatic factor. The dry season started in Ivory Coast and Ghana and lasts from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. The wind would already be present in the northern part of the country, which explains why rainfall was already more concentrated in the coastal areas. Last week's above-normal rainfall of more than 25 mm in some areas has reassured producers.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 2967 from 3048 thousand 60 kg bags last week. ICE US and EU cocoa stocks are above last season's stocks at the same period.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week up at 90.976, although the long-term trend is still bearish. The DXY consolidated last week. The ECB increased its asset repurchase program by $500 billion, and, the U.S. support plan is still lagging behind, still failing to agree on emergency aid of just over $900 billion. The dollar has also strengthened against the pound sterling, on an increasingly likely no-deal, as the disagreements seem so deep.
A low dollar is generally favorable to dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The speculative net position on the cocoa futures markets is down this week to 32.379 K instead of 35.147 K.
Beginning of uptrend if channel breaksBeginning of uptrend if channel breaks. Potential TP = height of broken channel, also retest of previous highs. Support seems to have been found at 50% fib retracement level. Tight SL below 2500. RSI indicator seems to back the upside
Cocoa touched on 50% and time balance Cocoa touched on 50% retracement and 22 days up and 22 days down as on Dec 16, 2020
Should see it head up further .. target 3100.
Short term long - broke out and retested downwards channel A possible long in Cocoa, after breaking from a downtrend channel (now retesting it) and finding support at the 50% fib retracement level, cocoa might yet again go higher to retest the 2700 key level or 2730 (projected height of the broken channel).
Cocoa's seasonality is somewhat against higher prices at least until February-March, so beware of the short term perspective. Also, a weaker dollar is bullish for commodities like Cocoa.
Reliable ResistanceThere is a reliable resistance ahead. Seasonality hasn't been positive for cocoa in December/January over the past years, but historically, from February on, there has always been an uptrend. I think it can begin earlier in this cycle, but either way we have an excellent technical setup here.
Cocoa short termNo prediction just reading the chart and indicators. Not oversold enough, MA still negative, channel downtrend.
Cocoa - for my future referenceReady to make U turn. Not very high possibility of breaking the multiple resistance/ support level - strong buying at latest around 2500. Also since July we see HH and HL. Long term trend is pretty clear.
Weekly cocoa market review 12/07/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed higher at $2,654 per ton.
Ivory Coast lifts suspension of sustainability programs imposed on industrialist Hershey. Indeed, the U.S. chocolate maker has committed to pay the LID, a premium introduced by Ghana and Ivory Coast to ensure a decent income for producers. This marks a break in the tensions between the two countries and the manufacturer. The latter was accused last week of wanting to sabotage the LID by buying abnormally high volumes of cocoa directly on the futures market in order to avoid paying the premium.
For the 2020/21 season, the arrivals in Ivorian ports are 740K tons as of November 29, against 607K tons at the same period the previous season.
Cocoa stocks are down to 3048 thousand bags of 60 Kg.
The dry period in West Africa has begun and runs from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind coming from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. Below-normal rainfall in recent weeks could reduce the prospects for the end of the main harvest between January and March.
In Ivory Coast, Laurent Gbagbo would have received his passport on December 4 to be able to return to the country, a sign of appeasement sent by President Ouattara, certainly wanting to turn the page on the recent violence caused by the Ivory Coast presidential election.
Internationally, last week was marked by the sharp fall of the dollar. The DXY, after breaking the resistance of the 92, is heading towards the 90, and the Euro approached $1.22 after disappointing U.S. employment figures. Hopes for a vaccine, the FED reaffirming that the priority remains to support the economy, and the joint Democratic and Republican proposal for a $908 billion emergency plan are driving equity markets. Curiously, commodities as a whole did not benefit from the dollar's decline.
Discussions between the British and the Europeans continue as the December 31 deadline approaches in the hope of reaching a post-brexit trade agreement. Regarding the pandemic update, we have just passed the 67 million cases worldwide, with more than 1.537 million deaths. The United States continues to be the most affected country with more than 282,000 deaths and more than 14.7 million cases. Italy passes the 60,000 death mark, and the United States is facing a spectacular rebound of the epidemic with more than 230,000 cases Saturday, in 24 hours. The United Kingdom, the first country to license Pfizer vaccine, begins vaccination Tuesday.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average rainfall of more than 150mm. They were more mixed in November. The southern parts of these 2 countries received above normal rainfall and the northern parts were 50mm below normal. Cocoa trees are more affected by rainfall than any other climatic factor. The dry season started in Ivory Coast and Ghana and lasts from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. The wind would already be present in the northern part of the country, which explains why rainfall was already more concentrated in the coastal areas. Last week the rains were lower than normal in Ivory Coast and Ghana.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 3048 against 3111 thousand 60 kg bags last week. ICE US and EU cocoa stocks are above last season's stocks at the same period.
THE DOLLAR
The DXY index representing the Dollar against a range of foreign currencies closed last week down to 90.701, and the trend is still bearish. The DXY after breaking the 92 resistance, plunged last week and is on its way to the 90. The Euro rose as high as 1.2175 on Friday after very disappointing U.S. employment figures. As a backdrop, Powell said the priority remains to support the economy, and Democrats and Republicans are working together on a $908 billion emergency support proposal as a first step. For later, once the Joe biden administration is in place, work for a more substantial plan. Forex traders are anticipating an increase in the money supply.
A low dollar is generally good for dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The speculative net position on the cocoa futures markets is up this week to 35.147 K instead of 34.465 K.
COCOA on the previous highs 🦐COCOA future after hitting the 2820 level retraced back until the previous high over a daily support.
From here IF the price will break below we can a test of the 0.382 or 0.5 fib level.
We will wait for a new sign of inversion to see a long order.
–––––
Follow the Shrimp 🦐
Keep in mind.
🟣 Purple structure -> Monthly structure.
🔴 Red structure -> Weekly structure.
🔵 Blue structure -> Daily structure.
🟡 Yellow structure -> 4h structure.
⚫️ Black structure -> <4h structure.
Here is the Plancton0618 technical analysis , please comment below if you have any question.
The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Indecisivness and IrregularitiesCocoa usually begins falling by the end of they year. With the exception of 2018, there has been either a downside consolidation or flash crash in the recent yeats. Something has trigerred massive growth it November which is not common. Shieldbreaker indicator which measures distances almost made a new green high. I would expect that between February and May.
The growth is clearly created by fundamentals. Lack of supply, clashes between processors, companies not paying farmers among recent news headlines. Since 24th November, there has been no more buying and it seems the price made a beautiful dumpling top.
Watch your position though. Even though recent years favour shorts, the price has historically been higher and the downside seasonality idea is made of only the last few years. Considering 15y or 30y averages in these months, the price used to be be bullish in Nov/Dec.
Weekly cocoa market review 11/30/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed higher at $2,766 a ton.
Some manufacturers bought cocoa directly on the futures markets to avoid paying the LID, a $400 premium introduced by Ghana and Ivory Coast to ensure a decent income for producers. The result has been a decline in ICE stocks that fuels speculation. It should be recalled that according to forecasts, the next harvest will be in surplus, and that in early November, the Coffee and Cocoa Council announced that it was having trouble selling 500K tons of cocoa from its intermediate harvest.
For the 2020/21 season, the arrivals in Ivorian ports are 646K tons as of November 22, against 518K tons at the same period the previous season.
Cocoa stocks are down to 3111 thousand 60 kg bags.
The dry period in West Africa has begun and runs from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind coming from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. The wind would already be present in the northern part of the country, which explains why rainfall was already more concentrated in the coastal areas. The moisture in the soil should allow for an abundant harvest until the end of January-February, according to producers.
Internationally, the prospect of Janet Yellen, former FED president, serving as secretary of the treasury in Joe Biden's future administration, and the hope of a vaccine is fuelling markets. Many countries are preparing vaccination campaigns. Investors are also anticipating a massive stimulus package, with increased government spending, which is weakening the dollar. The dollar is still low and in a downward trend, the DXY closes at 91.790.
While waiting for a vaccine, the pandemic is not weakening. We have just passed 62 million cases worldwide, with more than 1.460 million deaths. The United States is the most affected country with more than 267,000 deaths and more than 13 million cases.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average rainfall of more than 150mm. They were more mixed in November. As can be seen on the 30 day maps below only the southern parts of these 2 countries received above normal rainfall and the northern parts were 50mm below normal. Cocoa trees are more affected by rainfall than any other climatic factor. The dry season started in Ivory Coast and Ghana and lasts from mid-November to March. Producers hope that the Harmattan will not come too early this year. It is a dusty wind from the northeast of the Sahara that blows during the dry season. Harmattan can have a negative impact on crops. The wind would already be present in the northern part of the country, which explains why rainfall was already more concentrated in the coastal areas.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 3111 from 3170 thousand 60 kg bags the previous week. ICE US and EU cocoa stocks rose above last season's stocks at the same time.
THE DOLLAR
The DXY index representing the Dollar against a range of foreign currencies closed last week down to 91.790, and the trend is still bearish. This is the first close below the 92 resistance level in almost 2 1/2 years. The presumed appointment of Janet Yellen as U.S. Treasury Secretary and Joe Biden's talk of a massive $3 trillion support package weighed on the Dollar. Forex traders are anticipating an increase in the money supply. In addition, U.S. unemployment figures, consumer confidence indexes and inflation figures disappointed last week.
A low Dollar is generally favorable to the Dollar-denominated commodities markets.
Cocoa longMacro Bull for Cocoa. Looking for a buy opportunity at the 20ma or the .286 fib level. Above the 200ma
COCOA on a strong bullish impulse 🦐COCOA future daily chart after the previous impulse retraced until exactly the 0.786 fib level before starting strong bullish leg.
The price never retraced yet and in the next days we can expect a retracement move until the 0.382 or the level above.
According to Plancton's strategy (check our Academy), we can set a nice order
–––––
Follow the Shrimp 🦐
Keep in mind.
🟣 Purple structure -> Monthly structure.
🔴 Red structure -> Weekly structure.
🔵 Blue structure -> Daily structure.
🟡 Yellow structure -> 4h structure.
⚫️ Black structure -> <4h structure.
Here is the Plancton0618 technical analysis , please comment below if you have any question.
The ENTRY in the market will be taken only if the condition of the Plancton0618 strategy will trigger.
Weekly cocoa market review 11/23/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed sharply higher at $2,712 a ton.
According to Bloomberg, Hershey is responsible for the sudden upward movement in cocoa prices by buying massively on the December futures contracts to avoid paying the LID and thus make big savings. More and more traders are using the cocoa market to avoid the LID, the $400 premium introduced by Ghana and Ivory Coast, which greatly annoys these two countries. Joseph Aidoo director of Cocobod accuses the industrialists of wanting to derail the LID. Under these conditions, the 2 countries threaten to suspend the sustainability programs, allowing companies to display ethical origins and sustainable cultivation of cocoa.
The dry period in West Africa begins in mid-November, with some producers further north worried about an early arrival of the Harmattan, the dry and dusty wind coming from the northeast of the Sahara. Moisture in the soils should allow a bumper harvest until the end of January-February for producers further south.
Hope for a vaccine is fuelling the markets, and Pfizer and Moderna have announced very encouraging results. Many countries, such as the United States, Germany, Spain, and others, are already preparing vaccination campaigns. The pandemic continues unabated, with more than 58 million cases worldwide and more than 1.382 million deaths. The United States is the most affected country with more than 256,000 deaths and more than 12 million cases.
The hope of a vaccine, as well as the prospects of a massive stimulus package, is driving the markets. The dollar is still low and in a downward trend, the DXY closes at 92.392.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average of more than 150mm. The dry season usually starts in mid-November. Last week, about 25-50mm of rainfall fell mainly in the southern part of Ghana and Ivory Coast along the coastal areas. Producers hope that Harmattan will not come too early this year. It is a dusty wind from the northeastern Sahara that blows from December to March during the dry season. Harmattan can adversely affect crops. The wind would already be present in the northern part of the country, which explains why rainfall is increasingly concentrated in coastal areas. The rainfall forecast for next week is about the same as last week.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 3170 compared to 3254 thousand 60 kg bags the previous week. ICE US and EU cocoa stocks rose above last season's stocks at the same time.
THE DOLLAR
The DXY index representing the Dollar against a range of foreign currencies closed last week down to 92.392, and the trend is still bearish. Joe Biden, who will be invested on January 20, spoke of a $3 trillion support plan. Forex traders are anticipating an increase in the money supply. Treasury Secretary Steven Mnuchin has called on the FED to return unused funds from emergency aid programs for the coronavirus crisis. The FED has decided to do so, although it considers this decision premature. Last week, this did not cause much movement in the currency market, which remained relatively calm.
A low dollar is generally favorable to the dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The speculative net position on the cocoa futures markets is up this week to 16.362 K instead of 7.604 K.
we are in sellers zone - short very volatile asset. i'm making small short contract from level 2430. i didn't analyse supply / demand, just TA.
Weekly cocoa market 11/16/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
TECHNICAL ANALYSIS OF COCOA
Last week, ICE U.S. cocoa futures closed higher at $2,388 a ton.
Hopes for a vaccine are fuelling markets, Moderna announced very encouraging results on Monday. The pandemic is not weakening, we have just surpassed 54 million cases worldwide, with more than 1.320 million deaths. Faced with the second wave, Europe has been confined. The United States is the most affected country with more than 246,000 deaths and more than 11 million cases, and is also taking restrictive measures such as in New Jersey and Michigan.
The 2020/21 season is off to a strong start with arrivals in Ivorian ports of 485K tons as of November 8, against 362K tons at the same period the previous season. The dry period in West Africa begins in mid-November and producers are confident. Moisture in the soils should allow for an abundant harvest until the end of January-February. Crushing reports for the third quarter were down 4.7% in Europe, down 4.02% in the USA, and down 10.1% in Asia. Reconfinement and the closure of bars and restaurants in Europe will undoubtedly weigh on the fourth quarter.
Tensions in Ivory Coast following the presidential election have resulted in 85 deaths and 500 injured since August. President Ouattara was re-elected with more than 94% of the votes. The opposition does not recognize this election, deeming a third term unconstitutional, and to call for a transitional government. The government sent police units to surround the homes of opposition leaders, including that of Henri Konan Bédié, the former president. Guillaume Soro, in exile in France, called for an army uprising. Opposition spokesman Affi N'Guessan was arrested and investigated for "conspiracy against the authority of the state" and "acts of terrorism". The Constitutional Council officially validated the election. President Ouattara and Henri Bédié, former president and opposition leader, met for an exchange of about 40 minutes, both wanting to work for peace. Ouattara noted the handing over of a passport to Laurent Gbagbo, a further step toward reconciliation.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average of more than 150mm. Last week's rains were also above the five-year average in most of Ivory Coast's cocoa-producing regions, with about 25-50 mm of rainfall. Forecasts in Ivory Coast and Ghana are now normal for next week, with rainfall probabilities of 25 to 50 mm. It should also be noted that the dry season usually starts in mid-November, early December.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 3254 against 3361 thousand 60 kg bags the previous week. ICE US and EU cocoa stocks rose above last season's stocks at the same time.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 92.755, after a sharp decline in early November. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in on January 20, the Senate remains Republican for now, but a second round will be held on January 5 in Georgia. There is still a lot of uncertainty about the size and date of the famous plan to support the American economy. The Fed has announced that it will increase its "firepower" if necessary. Forex traders therefore anticipate an increase in the money supply.
The pandemic is not weakening, Europe has reconfirmed itself in the face of the second wave, the United States is also taking new measures of restrictions in certain states. The hope of a vaccine, with the announcement of Pfizer, calms the markets and prevents for the moment the dollar from playing its role as a safe haven. Caution is still called for, however, as many questions about vaccines remain unanswered. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months.
A low dollar is generally favorable to the dollar-denominated raw materials market.
Weekly cocoa market review 11/09/2020.Support us by consulting our free daily magazines with color stock charts and weather maps on our commodity-market-review.com website.
ANALYSE TECHNIQUE DU CACAO
Last week, ICE U.S. cocoa futures closed higher at $2,3333 per ton.
The pandemic continues unabated, we've just surpassed 50 million cases worldwide, with more than 1.250 million deaths. Faced with the 2nd wave, Europe is confining itself or imposing curfews. The United States is the first country to exceed 100,000 new cases in one day. Joe Biden wants to set up a crisis unit. In Europe, many non-essential businesses are closed such as bars and restaurants.
After a very good 2019/20 harvest, the 2020/21 season is off to a strong start with arrivals in Ivorian ports of 406K tons on November 1st, compared to 287K tons at the same period the previous season. Crushing reports for the third quarter were down 4.7% in Europe, down 4.02% in the USA, and down 10.1% in Asia. Reconfinement and the closure of bars and restaurants in Europe will undoubtedly weigh on the 4th quarter.
Tensions in The Ivory Coast following the presidential election have resulted in about forty deaths since August. The opposition does not recognize this election and has announced the creation of a transitional government. In response, the government sent police units to surround the houses of opposition leaders, including that of Henri Konan Bédié, the former president. Guillaume Soro, in exile in France, called on the army to rise up. Opposition spokesman Affi N'Guessan was arrested and investigated for "conspiracy against the authority of the state" and "acts of terrorism".
According to Reuters, bean arrivals at Ivorian ports fell last week due to the risk of violence. Producers are afraid to return to the farms, and prefer to stay at home.
In the United States, Joe Biden will be sworn in on January 20, 2021, the Senate remains Republican for the moment, but there will be a second round in Georgia on January 5. If the Democrats win both seats, it would bring the distribution to 50-50 seats, and Vice President Kamala Harris could constitutionally break the tie. In the absence of a majority in the Senate, voting on a plan to support the U.S. economy would be made more difficult. Therefore, uncertainties remain as to the timing and amount of the plan. Last week the Fed reaffirmed its willingness to support the US economy and is ready to "increase its firepower" if necessary. The dollar fell sharply, with the DXY dropping from over 94 at the beginning of last week to close Friday at 92.236, a drop that benefited all dollar-denominated commodities.
WEATHER IN WEST AFRICA
Ivory Coast and Ghana experienced above normal rainfall in October with an average of more than 150mm. Last week's rains were also above the five-year average in most of Ivory Coast's cocoa-producing regions, with about 50 mm of rainfall. Forecasts in Ivory Coast and Ghana are now above normal for next week, with high probability of rainfall above 50 mm. With the unrest related to the Ivorian election, some producers have been reluctant to visit farms. A prolonged absence with heavy rains could impact the quality of the beans. It should also be noted that the dry season usually begins in mid-November, early December.
ICE US CERTIFIED COCOA STOCKS
Cocoa stocks are down to 3361 against 3456 thousand 60 kg bags last week. ICE US and EU cocoa stocks are above last season's stocks at the same period.
THE DOLLAR
The DXY index representing the Dollar against a basket of foreign currencies closed last week, down sharply at 92.236. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in January 20, the Senate remains Republican for now, but a second round will be needed in Georgia. Therefore, there is still a lot of uncertainty about the size and date of the famous plan to support the American economy.
Last week's statements by the FED certainly weighed heavily on the dollar. The FED announced that it could increase "its firepower" if necessary. Forex traders are therefore anticipating an increase in the money supply.
On Sunday, the United States experienced a record covid-19 for the 4th consecutive day, and even though the news was dominated by the elections, the pandemic could be remembered by investors if the US faces a 2nd wave similar to the one hitting Europe. A return of the dollar as a safe haven is not a possibility to be ignored. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months.
A low dollar is generally favorable to the dollar-denominated commodity markets.
COMMITMENTS OF TRADERS
The weekly COT (Commitments of Traders) report of the Commodity Futures Trading Commission (CFTC) shows all the positions opened by all market participants. The COT report is published on Friday, and reflects the open positions on Tuesday of the same week. It shows the position of commercial traders (producers, commodity buyers, ...) but also non-commercial (speculators).
The net positions of speculators on the futures markets are particularly interesting to observe.
The speculative net position on the cocoa futures markets is down sharply this week to 6.908 K instead of 20.449 K.
