Cocoa futures rallied to new highs today not seen in four-and-a-half years as West Africa’s cocoa season is reportedly off to a great start. Cocoa futures are up 15 points today trading at $3,392 per ton at the InterContinental Exchange in London.
One of Africa’s top agriculture investment bank’s stated the strong start is to be contributed with a rise in farm gate prices encouraging farmers there to drawdown current inventories. Other conditions exist which may keep cocoa in demand since the health of the new crop has yet to be evaluated, and fears of the effect of drier weather affecting this crop.
Nicholas Medina, a futures and options specialist for Capital Trading Group in Chicago, shared his fundamental view of the cocoa futures market by stating, “The African cocoa farmers held back on inventory allowing the market to rally to their desired prices for selling their product.” Medina added, “With cocoa (futures) prices at multi-year highs, with uncertain conditions ahead, this situation can now convert to a ‘weather market’ that will have to be watched.”
The trend for cocoa futures is up with no top in sight. Much resistance at current levels, but has cocoa futures have proved to be a “buy the dips” market for the past couple of months.
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