Month-end rebound breaks 6-day losing streak 📈
Cocoa prices are rising today by over 6%, once again approaching the $10,000 level. Today's gains are most likely a rebound after recent sharp declines and month-end rebalancing. Since May 20, prices fell as much as 20% from their highest to lowest levels, but these declines have now significantly eased. It is worth noting, however, that cocoa prices have increased by about 12% throughout May.
Volatility in the cocoa market is noticeably increasing. The recent declines were driven by reports of rainfall in West African countries, which could improve production prospects. However, these remain highly uncertain. Cocoa stocks continue to rise, nearing 2.2 million bags, an increase of nearly 1 million bags compared to the lowest levels in 20 years seen in January.
Start investing today or test a free demo
Create account Try a demo Download mobile app Download mobile appOn the other hand, some positive long-term factors include:
-
A continued drop in deliveries to ports in Ivory Coast. In the week ending May 25, deliveries were just 20,000 tons, compared to 32,000 tons a year earlier.
-
Ghana is expected to produce less than the previously forecasted 650,000 tons in the 2024/25 season. Production in the next season remains uncertain.
COCOA (H4)
From a technical analysis perspective, it's worth noting that cocoa is rebounding from the 61.8% retracement of the last upward wave, which supports the continuation of the upward trend. The price has also moved back above the rising trendline. Additionally, net positioning in cocoa has been increasing since mid-April, although it remains historically very low.
Source: xStation5
The material on this page does not constitute as financial advice and does not take into account your level of understanding, investment objectives, financial situation or any other particular needs.
All the information provided, including opinions, market research, mathematical results and technical analyses published on the website or transmitted to you by other means is provided for information purposes only and should in no event be interpreted as an offer of, or solicitation for, a transaction in any financial instrument, nor should the information provided be construed as advice of legal or fiscal nature.
Any investment decisions you make shall be based exclusively on your level of understanding, investment objectives, financial situation or any other particular needs. Any decision to act on information published on the website or transmitted to you by other means is entirely at your own risk. You are solely responsible for such decisions.
If you are in doubt or are not sure that you understand a particular product, instrument, service, or transaction, you should seek professional or legal advice before trading.
Investing in OTC Derivatives carries a high degree of risk, as they are leveraged based products and often small movements in the market could lead to much larger movements in the value of your investment and this could work against you or for you. Please ensure that you fully understand the risks involved, taking into account your investments objectives and level of experience, before trading, and if necessary, seek independent advice.
