Starting with a look at the action in Cocoa #7 (CAU24), +9.86%, there is again increased volatility in this last week on this contract - and expect more to come.
After the selloff from April, the 20-unit exponential moving average (EMA) proved to be a solid support. Despite reassurances in Ghana about recovering crops, that is for next season, and the market still fears insufficient beans supply this year. Moreover, top producer Ivory Coast has reduced forward sales for next season by -35%, adding to concerns on supply.
