Cocoa prices touch fresh high on improving demand

Friday, June 20, 2014

Front month cocoa futures traded on ICE reached a fresh record high yesterday as contracts for September delivery traded towards $3,218/tonne before closing marginally lower. Demand for cocoa beans across Asia has been steadily rising over the past year, fuelling a 15% price rise. Futures prices struggled to hold onto the higher levels as firm resistance seems to be forming around the recent highs and with improving weather conditions in key growing regions further upward momentum may find it difficult to hold onto higher levels.

Crude oil futures extended gains on deteriorating conditions in Iraq with front month Brent futures adding 0.7% throughout the session. Intraday gains surged towards $115.70 before settling to a close above $115/bbl as futures reached their highest price since mid-September last year. This morning tentative support around $115 seems to be holding up fairly well as news of fighting for control of the Baiji refinery inflate the risk premium. Brent prices have rallied higher in all but one of the last 7 sessions and are on track to post a second consecutive week of gains.

Spot gold prices surged higher yesterday, adding 3.43% and closing just below $1,335/oz as investors speculated that interest rates in the US would remain low for a considerable amount of time. Prices rallied to a two and a half month high on the Fed’s outlook with violence in Iraq spurring further demand for the safe haven asset. The yellow metal gained further support from a weaker dollar index, which gapped significantly lower on Thursday and tested support around 80.150 before eventually closing above the 200 day MA around 80.290 which caught many investors by surprise as they were expecting a more hawkish outlook from the Fed.

Cocoa futures reach record intraday high

CCU4 Comdty COCOA FUTURE S 2014 06 20 08 16 39

Gold prices surge on Fed outlook

XAU Curncy Gold Spot Oz D 2014 06 20 08 26 10

 

Events for today

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DE

May

Producer Prices

0900

EZ

Apr

Current Accounts

0930

UK

May

PSNCR & PSNB

LT:

Jun  FTSE 100 Index Futures (LIFFE) 

OE: 

Jun  FTSE 100 Index & Equity (LIFFE) 

Topics: Gold, Brent, DXY, Cocoa
More from: Kash Kamal