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The jury is still out on the impact of El NiñoWeather has always been a key factor influencing the outlook for major commodities, especially agricultural commodities. The arrival of El Niño in June 2023 has led to a wide divergence in the performance across agricultural commodities. As discussed in our previous blog “What does El Niño’s return mean for commodities?”, the effects of El Niño include specific wind patterns across the Pacific Ocean, heavy rain in South America, and droughts in Australia and parts of Asia including India and Indonesia. This is why certain commodities such as cocoa, sugar, soybean oil and grains tend to depict a price positive environment following an El Niño phenomena. So far in 2023 – cocoa, sugar and cotton have been key beneficiaries of the El Niño weather phenomena whilst wheat, corn and soybeans have posted a weaker performance. How is the El Niño evolving? With the National Oceanic Atmospheric Administration (NOAA) forecasting more than a 95% probability of El Niño continuing through the Northern Hemisphere winter through January - March 2024 , chances are high that we continue to see further weather abnormalities over the coming months. There is now around a 71% chance that this event peaks as a strong El Niño this winter1. The main El Niño monitoring metric showed the average sea surface temperature in the central and eastern equatorial Pacific Ocean—was 1.3˚Celsius (2.3˚Fahrenheit) above the long-term average in August, up from 1˚C in July1. The whole ocean (Pacific, Atlantic, Indian, Artic and Southern Ocean ) was over 1˚C above the 20th-century average in August, the first time that’s happened in the 174-year record2. An important aspect of ocean changes is the sea level height. Presently there is a strong ocean sea level rise in the easterly tropical Pacific, a clear sign that El Niño is active3. The changes in the ocean heat content are mainly due to the expansion and rise of the strong subsurface warm pool. This also causes the sea level height to increase, usually associated with warmer waters. Agricultural commodities price response to El Niño will vary The growing of agricultural products is sensitive to weather patterns. For some crops, El Niño could boost production, while for others it could damage production. This is because the drift in warm water across the Pacific moves’ evaporation and rain such that Southeast Asia and Australia tend to get drier while Peru and Ecuador tend to receive more precipitation. Should the weather event intensify, it could be a significant catalyst for price gains in cocoa, soybean oil, sugar, and grains as discussed in “What does El Niño’s return mean for commodities?” blog. Cocoa and sugar lead the commodity scoreboard in El Niño ’s slipstream Cocoa has been an important beneficiary of the El Niño. The concentration of supply in West Africa, nearly 70% of global supply4, underlines the outsized impact of the region’s weather patterns on the world’s cocoa supplies and prices. The emerging El Niño is likely to hamper the next main crop that begins in October as it tends to bring dry and hot conditions to West Africa. This comes at a time when heavy rains in West Africa have triggered the Cocoa Swollen Shoot Virus Disease (CSSVD) and the spread of Black pod diseases. The diseases alongside the high cost of inputs, have not spared the two leading producers (i.e., Côte d’Ivoire and Ghana) and affected their volume of production5. Despite high cocoa prices, demand evident from cocoa grinding continues to rise in Asia and the US6. Sugar has also benefitted from the emergence of El Niño as lower rainfall in Asia, namely India and Thailand have resulted in lower sugar production. However, we expect further upside for sugar prices to be capped as Brazil (the world’s largest producer and exporter) is likely to fill the gap. Production in Brazil’s main Centre- South (CS) growing region between the start of the crop year in April and mid-August already amounted to 22.7mn tons, which is up 22% over the same period last year7. What’s more, the sugar mix increased to 51.1% in H1 September, up from 50.7% in H2 August signalling that Brazilian mills continue to favour sugar production over ethanol amidst higher sugar prices5. Extreme weather conditions in China have reduced domestic supplies. China is also planning to release 1.3mn tons of sugar from its reserves, to increase domestic supplies and stabilise prices4. Wheat prices stand to benefit as key producers to face the impact of El Niño On the other end of the spectrum, grains (namely wheat, corn and soybeans) continued to struggle as the United States Department of Agriculture (USDA) outlined a more bearish outlook for corn while bullish for wheat. The corn harvest is progressing well with 15% of the crop harvested, up from 11% at the same stage last year and also above the five-year average of 13%8. Moscow’s revocation of the secure grain’s corridor through the Black Sea, alongside the Russian attacks on key infrastructure along the Danube River in Ukraine, have lowered grains exports from Ukraine by 25% over the prior year. Yet wheat prices have fallen sharply this year as Russia’s record crop is enabling it to ship huge volumes to world markets. The Grain Industry Association of Western Australia has likewise reduced its crop forecast for the region by 1.5 million tons to 8.5 million tons. Most of Australia is expected to face warm and dry conditions over the next three months9, so further downward revisions are on the cards. Argentinian farmers are also battling with a drought. The Buenos Aires Grain Exchange has already warned that the crop in 2023/24 could be impaired if there is no rainfall in the near future. As the prospects for the wheat crop amongst major producer countries are becoming increasingly weak, we expect wheat to benefit from these rising tailwinds. Conclusion There has been a wide divergence within the commodity linked Exchange Traded Funds (ETF) flows since the start of the year. Agriculture linked ETFs have seen US$458mn worth of outflows while energy linked commodity ETFs raked in US$1.2Bn worth of inflows10. Agriculture linked commodity ETFs likely faced outflows owing to profit taking. We continue to expect plenty of upside in select agricultural commodities as the impact of the El Niño is likely to intensify over the upcoming winter. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
ICEUS:CC1!
by aneekaguptaWTE
Cocoa outlook improves as El Niño StrengthensCocoa continued its upward price trajectory, rising 3% over the prior month (22 May to 23 June 2023). The International Cocoa Organization (ICCO) has corrected its forecast for the supply deficit on the cocoa market in the current crop year up from 60,000 tonnes to 142,000 tonnes as production is expected to be lower and grinding higher than previously expected. The production estimate was lowered by 37,000 to 4.98 million tonnes, while the grinding forecast was revised higher by 45,000 to 5.07million tonnes. The revisions are largely due to Ivory Coast (the world’s largest cocoa producing country) where the crop is set to be 30,000 tonnes lower than the prior forecast, but still 79,000 tonnes higher than last year, resulting in a minor downward revision given the considerable year-on-year shortfall in cocoa arrivals at the ports. On the other hand, 35,000 tonnes more cocoa is set to be ground in Ivory Coast than previously predicted by the ICCO. The higher deficit is likely to push global stocks down to 1.63 million tonnes by the end of the crop year, which equates to a good 32% of annual grinding. The last time the stocks-to-grinding ratio was any lower was 38 years ago. The cocoa price remains well supported against this backdrop. El Niño is now once again a source of concern, as prospects for the new season starting September are not bright due to the threat of dryness. In addition, recent heavy rains have been reported in major producing countries, slowing down mid-crop harvest in top supplier Ivory Coast and elevating fears of disease outbreaks. The front end of the cocoa moved more deeply in contango, with the negative roll yield of -2.5% weighing on performance. This material is prepared by WisdomTree and its affiliates and is not intended to be relied upon as a forecast, research or investment advice, and is not a recommendation, offer or solicitation to buy or sell any securities or to adopt any investment strategy. The opinions expressed are as of the date of production and may change as subsequent conditions vary. The information and opinions contained in this material are derived from proprietary and non-proprietary sources. As such, no warranty of accuracy or reliability is given and no responsibility arising in any other way for errors and omissions (including responsibility to any person by reason of negligence) is accepted by WisdomTree, nor any affiliate, nor any of their officers, employees or agents. Reliance upon information in this material is at the sole discretion of the reader. Past performance is not a reliable indicator of future performance.
NYMEX:CJ1!
by aneekaguptaWTE
Cocoa - SHORT; SELL it here!This is very much in the same boat as Coffee - out of season, increasingly negative fundamentals, etc.. (Now, even cocoa brokers are entertaining each other tall tales, trying to pass the time and in an attempt to reinvigorate the business. Yeah, how could that not work?! ... ;-) A resumption of a U NYSE:D rally, at any point, will put a further lid on this one - much like on coffee. Looking down from here, there is a looong way to go, enough to catch vertigo. This has also been wicking here, something fierce, for some days now!
ICEUS:CC1!Short
by Nemo_Confidat
2
CC Cacao: Trade Commodity THIS EasterHi Traders, Investors and Speculators of the Charts 📈📉 Ev here. Been trading crypto since 2017 and later got into stocks. I have 3 board exams on financial markets and studied economics from a top tier university for a year. Are you looking to make a trade out of Easter weekend? Look no further than Cocoa futures, or chocolate. Cocoa is a soft commodity that is used to produce chocolate, and it is traded on several global commodity exchanges. One of the most significant exchanges for trading cocoa futures is the ICE Futures US (Intercontinental Exchange Futures U.S.). The exchange offers futures contracts for cocoa, which allows investors to speculate on the future price of cocoa beans. The cocoa futures contract on the ICE Futures US is traded under the symbol CC. Each CC contract represents 10 metric tons of cocoa beans, and the contract price is quoted in U.S. dollars per metric ton. The contract months for trading cocoa futures are March, May, July, September, and December. The price of cocoa can be influenced by several factors, including supply and demand, weather conditions, and political instability in cocoa-producing regions. For example, adverse weather conditions, such as drought or flooding, can reduce cocoa yields and increase prices. Similarly, political unrest or conflicts in cocoa-producing countries can disrupt supply chains and lead to higher prices. Easter Weekend is a time known well for Easter bunny egg hunts and other chocolate delights, meaning that demand increases for cocoa in the months leading up to Easter. Considering that from a chart analysis the price of Cocoa has already increased over the past few months, it is the ideal time to consider a short right after Easter. Easter has become a global celebration, and many cultures around the world have their unique ways of celebrating the holiday. For example, in Greece, the week leading up to Easter is called "Holy Week," and it is a time of fasting and religious observances. On Easter Sunday, families gather to celebrate with a feast of lamb and other traditional foods. In the United States, Easter is celebrated with the Easter Bunny, who brings baskets of candy and treats to children. The Easter Bunny has its origins in German folklore, where it was a symbol of fertility and new beginnings. The tradition was brought to America by German immigrants in the 1700s. In many Latin American countries, Easter is celebrated with parades and processions, where people carry statues of Jesus and the Virgin Mary through the streets. In Spain, there is a tradition called "Semana Santa," or "Holy Week," which involves elaborate processions and celebrations. In India, the Christian community celebrates Easter by attending church services and exchanging gifts and greetings with friends and family. The holiday is also an opportunity for people of different faiths to come together and celebrate the arrival of spring. In conclusion, Easter is a holiday that is celebrated around the world as a time of new beginnings, renewal, and the victory of life over death. Whether celebrated with bunnies and candy or religious observances and parades, Easter is a time for people of all cultures and faiths to come together and celebrate the beauty and wonder of spring. _______________________ 📢 Show us some LOVE 🧡 Follow for daily updates and trade ideas on Crypto , Stocks , Forex and Commodities 💎 We thank you for your support ! CryptoCheck
ICEUS:CC1!Short
by CryptoCheck-
34
Cocoa Futures ( CC1! ), H4 Potential for Bullish ContinuationTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Continuation Type: Bullish Continuation Resistance: 2838 Pivot: 2660 Support: 2565 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud, indicating a bullish market structure. If this bullish momentum continues, expect price to retest the pivot at 2660 where the overlap support and 50% Fibonacci line is before heading back up towards the resistance at 2838, where the previous swing high is. Alternative scenario: Price may head back down towards the support level at 2565, which is the overlap support. Fundamentals: There are no major news.
ICEUS:CC1!Long
by Genesiv
Cocoa Futures ( CC1! ), H4 Potential for Bullish ContinuationTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Continuation Type: Bullish Continuation Resistance: 2838 Pivot: 2660 Support: 2565 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud , indicating a bullish market structure. If this bullish momentum continues, expect price to retest the pivot at 2660 where the overlap support and 50% Fibonacci line is before heading back up towards the resistance at 2838, where the previous swing high is. Alternative scenario: Price may head back down towards the support level at 2565, which is the overlap support. Fundamentals: There are no major news.
ICEUS:CC1!
by Tickmill
Cocoa Futures ( CC1! ), H4 Potential for Bullish ContinuationTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Continuation Type: Bullish Continuation Resistance: 2838 Pivot: 2660 Support: 2565 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud, indicating a bullish market structure. If this bullish momentum continues, expect price to retest the pivot at 2660 where the overlap support and 50% Fibonacci line is before heading back up towards the resistance at 2838, where the previous swing high is. Alternative scenario: Price may head back down towards the support level at 2565, which is the overlap support. Fundamentals: There are no major news.
ICEUS:CC1!Long
by Genesiv
#CC #Cocoa #Cacao Since mid-September CC has started an up-trending channel reaching above 2600. This is usually Put range to me: specs tend to sell at these levels reason being short term it is a peak. I would not be surprised if it would not hold. Would be interesting to see the put/call ratio at this level. On the other hand, much has been said about recession in these last weeks. Data flowing from Asia is not great (South Korea), as is some bigger names reporting earnings in the USA. Lots of layouts since 3q 2022 showing that there is not enough demand, or that businesses are getting ready for lower demand. That translates in non-essential items becoming secondary for consumers, in which chocolate can be included. Nevertheless, there has been strong demand in its raw material (cocoa) and as of this week positive data from US posting a relative better than expected GDP growth. As seen in other agricultural commodities, offer has been somewhat restrained due to higher cost of inputs (fertilizers), and harder commercial conditions worldwide (shipping). On the technical side, volume remains up and strong, both show support on its Short and Longer term MA. To see higher levels, CC would have to break above 2690. In the last 2 years, every time its hit above or at 2690 it has retreated back to its base line LB 2450. Desde mediados de septiembre, CC ha iniciado un canal de tendencia alcista que supera los 2600. Esto suele ser un rango Put para mí: los especuladores tienden a vender en estos niveles porque, a corto plazo, es un pico. No me sorprendería que no aguantara. Sería interesante ver la relación put/call en este nivel. Por otro lado, mucho se ha hablado de recesión en estas últimas semanas. Los datos que fluyen desde Asia no son excelentes (Corea del Sur), al igual que algunos nombres más importantes que reportan bajas ganancias en los EE. UU. Muchos despidos desde 3q 2022 muestran que no hay suficiente demanda o que las empresas se están preparando para una menor demanda. Eso se traduce en que artículos no esenciales pasen a ser secundarios para los consumidores, en los que se puede incluir el chocolate. Sin embargo, ha habido una fuerte demanda en su materia prima (cacao) y a partir de esta semana datos positivos de EE. UU. que muestran un crecimiento del PIB relativamente mejor de lo esperado. Como se ha visto en otros productos básicos agrícolas, la oferta se ha visto algo restringida debido al mayor costo de insumos (fertilizantes) y condiciones comerciales más duras en todo el mundo (logistica). En el aspecto técnico, el volumen se mantiene alto y fuerte, ambos muestran soporte en su media móvil de corto y largo plazo. Para ver niveles más altos, CC tendría que romper por encima de 2690. En los últimos 2 años, cada vez que toca por encima o llega a 2690, ha retrocedido a su línea base LB de 2450.
ICEUS:CC1!
by ejencalada
Cocoa Futures ( CC1! ), H4 Potential for Bullish RiseTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Rise Type: Bullish Rise Resistance: 2699 Pivot: 2564 Support: 2451 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud , indicating a bullish market structure. If this bullish momentum continues, expect price to head back up towards the resistance at 2671, where the previous swing high is. Alternative scenario: Price may break the pivot at 2564, where the 23.6% Fibonacci line is before heading towards the support level at 2451, where the 50% Fibonacci line is. Fundamentals: There are no major news.
ICEUS:CC1!
by Tickmill
CC1! Potential For Bearish ContinuationLooking at the H4 chart, my overall bias for CC1! is bearish due to the current price being below the Ichimoku cloud, indicating a bearish market. Looking for a sell entry at 2602, where the overlap resistance and 61.8% Fibonacci line is. Stop loss will be at 2675, where the recent high is. Take profit will be at 2507, where the recent low is. Please be advised that the information presented on TradingView is provided to Vantage (‘Vantage Global Limited’, ‘we’) by a third-party provider (‘Everest Fortune Group’). Please be reminded that you are solely responsible for the trading decisions on your account. There is a very high degree of risk involved in trading. Any information and/or content is intended entirely for research, educational and informational purposes only and does not constitute investment or consultation advice or investment strategy. The information is not tailored to the investment needs of any specific person and therefore does not involve a consideration of any of the investment objectives, financial situation or needs of any viewer that may receive it. Kindly also note that past performance is not a reliable indicator of future results. Actual results may differ materially from those anticipated in forward-looking or past performance statements. We assume no liability as to the accuracy or completeness of any of the information and/or content provided herein and the Company cannot be held responsible for any omission, mistake nor for any loss or damage including without limitation to any loss of profit which may arise from reliance on any information supplied by Everest Fortune Group.
ICEUS:CC1!Short
by VantageMarkets
Cocoa Futures ( CC1! ), H4 Potential for Bullish RiseTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Rise Type: Bullish Rise Resistance: 2699 Pivot: 2564 Support: 2451 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud, indicating a bullish market structure. If this bullish momentum continues, expect price to head back up towards the resistance at 2671, where the previous swing high is. Alternative scenario: Price may break the pivot at 2564, where the 23.6% Fibonacci line is before heading towards the support level at 2451, where the 50% Fibonacci line is. Fundamentals: There are no major news.
ICEUS:CC1!Long
by Genesiv
Cocoa Futures ( CC1! ), H4 Potential for Bullish RiseTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Rise Type: Bullish Rise Resistance: 2699 Pivot: 2570 Support: 2470 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud , indicating a bullish market structure. If this bullish momentum continues, expect price to head back up towards the resistance at 2699, where the previous swing high is. Alternative scenario: Price may break the pivot at 2570, where the 50% Fibonacci line is before heading towards the support level at 2470, where the 61.8% Fibonacci line is. Fundamentals: There are no major news.
ICEUS:CC1!
by Tickmill
Cocoa Futures ( CC1! ), H4 Potential for Bullish RiseTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Rise Type: Bullish Rise Resistance: 2699 Pivot: 2570 Support: 2470 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud , indicating a bullish market structure. If this bullish momentum continues, expect price to head back up towards the resistance at 2699, where the previous swing high is. Alternative scenario: Price may break the pivot at 2570, where the 50% Fibonacci line is before heading towards the support level at 2470, where the 61.8% Fibonacci line is. Fundamentals: There are no major news.
ICEUS:CC1!Long
by Genesiv
Cocoa Futures ( CC1! ), H4 Potential for Bullish RiseTitle: Cocoa Futures ( CC1! ), H4 Potential for Bullish Rise Type: Bullish Rise Resistance: 2699 Pivot: 2570 Support: 2470 Preferred case: Looking at the H4 chart, my overall bias for CC1! is bullish due to the current price above the Ichimoku cloud , indicating a bullish market structure. If this bullish momentum continues, expect price to head back up towards the resistance at 2699, where the previous swing high is. Alternative scenario: Price may break the pivot at 2570, where the 50% Fibonacci line is before heading towards the support level at 2470, where the 61.8% Fibonacci line is. Fundamentals: There are no major news.
ICEUS:CC1!Short
by Genesiv
Cocoa hit our Target $26.90 next target $30.60Target reached with Cocoa at $26.90 7>21>200 MA Still bullish Target 2 due to an even bigger Cup and Handle sets the next price to $30.60 But with peripherals, there are a few reasons for the spike in Cocoa prices. People are buying chocolates! January is typically a busy month for chocolate manufacturers as they gear up for Valentine's Day, which results in increased demand for cocoa and can lead to an increase in prices. Speculative buying: Some investors and traders may anticipate a rise in cocoa prices and begin to buy up large quantities of cocoa futures in anticipation of a price increase. This buying activity can drive prices up. Production forecasts If there are forecast of lower cocoa production and if demand is strong, prices would rise as a lack of supply will cause price to increase.
ICEUS:CC1!Long
by Timonrosso