Conjecture about crops in the top grower benefiting from strong rainfall last week pulled cocoa futures to their lowest value in seven days on Friday, Bloomberg reports.
The soft commodity's growing regions in West Africa, like Ivory Coast, saw heavy rainfall, MDA Weather Services in Maryland stated in a report earlier this week. Ivory Coast presently is harvesting the smaller of two yearly crops, which is known as the mid-crop. The follow-up production typically benefits from rain that nourishes the crops at this time. The Daloa region of Ivory Coast, located in the central-western region, took on 40.3 millimeters of rain from May 11 through May 20, which trumps the typical amount of 39 millimeters.
"More rain in the Ivory Coast was seen as beneficial for the mid-crop there," states a report penned by futures specialist Arthur Liming with Citigroup Inc. in Chicago, according to Bloomberg.
At 11:07 a.m. on Friday, cocoa futures fell 1.31 percent, a $30 loss to $2,253 per metric ton.
Reuters reports Cargill announced earlier this month that it is well into the construction of a facility for processing cocoa in Indonesia, noting that demand for chocolate and additional products is growing.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
