May cocoa found some support overnight from improving macro-economic sentiment. This week’s choppy and two-sided trading pattern has been unable to prevent a negative close occurring during the last four sessions in a row, during which May cocoa has lost $89 or 3.8% in value. Cocoa and other physical commodity markets have been given a boost by rising optimism that Greece will be able to complete their debt swap deal by today’s deadline. A recent surge in Ivory Coast cocoa port arrivals may have eased supply concerns with the market, although this season’s totals are still behind last season’s pace. The upcoming mid-crop harvest may be delayed by this season’s excessive dry conditions, which may lead to additional supply tightness during the next few months.
While May cocoa found early strength from today’s broad-market optimism, trading may be volatile as the market reacts to fresh news headlines out of the Euro zone. Supplies still remain fairly tight in West Africa, which should help to support May cocoa well above this week’s lows.

Technical Analysis

COCOA (MAY): Declining momentum studies in the neutral zone will tend to reinforce lower price action. The market’s short-term trend is negative as the close remains below the 9-day moving average. The market’s close below the pivot swing number is a mildly negative setup. The next downside target is now at 2226. The next area of resistance is around 2305 and 2339, while 1st support hits today at 2249 and below there at 2226.

StockMarketNews Research Team