Cocoa Futures Remain Strong
Thursday, March 22, 2007
by Donna Heidkamp of RJO Futures
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Cocoa futures are being supported by both fundamental and
technical strength. According to the International Cocoa
Organization, high quality cocoa stocks are tightening. The Ivory
Coast is the largest producer of cocoa in the world producing over
40% of the world supply. As a result of recent dryness, they are
predicting a 20% production decline from last year. If the dryness
prevails through mid April, the Ivory Coast production could
decline by another 20%.
Some of the increased demand is due to dark chocolate craze.
Many reports have been released recently claiming that dark
chocolate contains healthy antioxidants. Many manufacturers are
releasing dark chocolate variaties to meet consumer demands.
Technically, the market broke out above the 1810 level this
week. As stops were hit, unhedged commercials reacted by buying
cocoa to try to lock in price risk.
Support: 1810
Resistance: 1980, 2110
Chart copyright 2007 CQG
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About the author
My interest in the futures industry stems from strong family ties to production agriculture in Hereford, Texas. After completing a bachelor's degree in Agricultural Economics at Texas Tech University in 1995, I moved to Chicago to participate in the Chicago Mercantile Exchange Agricultural Broker Training Program. The program exposed me to all facets of the futures industry, enabling me to work with experienced floor traders and develop a strong understanding of the intricacies of trading in the futures markets.
Since completing the training program in 1995, I have continued to gain a well-rounded knowledge of the industry by working as an order clerk, trading desk manager, and broker for RJO Futures. In 2004, I started a branch office of RJO Futures to focus my efforts on helping clients meet their trading goals. By identifying client objectives, managing risk, and providing a carefully tailored service, I serve as a dedicated liaison on all trading floors to full-service, broker assist, and on-line clients. My commentary can also be heard regularly on CNBC TV and Bloomberg.
In order to continue to better serve my customers in an ever-evolving and dynamic industry, I also completed a M.S. degree in Financial Markets and Trading from the Illinois Institute of Technology in May of 1999.
RJO Futures is the retail division of R.J. O'Brien, one of the oldest FCMs tracing its history back to 1914.
To learn more about RJO Futures, visit rjofutures.com
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