Cocoa futures hit 21-month low today, further extending a strong downward trend that resumed in early November. The contract managed to recover around 1% above yesterday close after diving below the lower bound of a decreasing channel in the early trading (-2.4% in the most critical moment).
The main driver of the resumed pression are the continued upside surprises in cocoa supplies from Ivory Coast, with port arrivals exceeding 100,000 tons for a third straight week. This steady flow has brought cumulative deliveries close to last year’s levels, easing concerns after a weak start to the season in October.
Worth noting that despite the recent surge in arrivals, underlying crop conditions remain fragile. Field surveys suggest this year’s tree crop is only marginally better than last season’s, with the main harvest potentially slightly weaker due to earlier dry weather. This could signal slower port arrivals in the coming weeks and potential easing of the downward trend.
RSI has returned to the oversold territory, following the easing of selling pressure in mid-October. Source: xStation5
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