Strategic trade
Trade view / 11 January 2017 at 14:19 GMT

Cocoa has an undervalued flavour

Managing Partner / Spotlight Group
United Kingdom
Instrument: CCH7
Price target: 2244
Market price: 2161.5

Cocoa looks to have the best potential among the soft commodities complex for price rises.
In contrast, there are increasingly bearish signals in coffee and cotton prices may have seen the growth opportunity already as the impulsive has been in place since June 2016.

Cocoa for March delivery hit USD 2,121/tonne in New York in late December which was the lowest since March 2013 and as such, despite the negative technical profile, the commodity has the space to improve.

 Source:, Spotlight Ideas    

Of course, I appreciate that there are good initial expectations for cocoa output in Ivory Coast, which is the leader global producer. However, there is potential support to prices from demand.
It is estimated that the cocoa grind will improve and absorb the big supplies due this seasons to favourable processing margins compared to recent years.

AC Nielsen research revealed a late-2016 improvement in US chocolate demand, with market sales up 2% in December, compared with an average growth rate in the July-to-December half of 0.2%.

Coca 5-Year Chart:
Cocoa Source: Spotlight Ideas

Management and risk:

Parameters: Cocoa USD/tonne (CCH7) March 2017

Entry: Buy 2161.50 (1352 GMT)

Targets: 2199 ... 2244 ... 2317

Stop: 2010

Time horizon: Strategic

— Edited by Clare MacCarthy

Non-independent investment research disclaimer applies. Read more
vanita vanita
Great call Steve 👍it's rocking...
Philidor Philidor
I should start copying you every time you write something on commodities that piques my interest, because I swear, every time I look at your trades in commodities, you're winning :)


The Saxo Bank Group entities each provide execution-only service and access to permitting a person to view and/or use content available on or via the website is not intended to and does not change or expand on this. Such access and use are at all times subject to (i) The Terms of Use; (ii) Full Disclaimer; (iii) The Risk Warning; (iv) the Rules of Engagement and (v) Notices applying to and/or its content in addition (where relevant) to the terms governing the use of hyperlinks on the website of a member of the Saxo Bank Group by which access to is gained. Such content is therefore provided as no more than information. In particular no advice is intended to be provided or to be relied on as provided nor endorsed by any Saxo Bank Group entity; nor is it to be construed as solicitation or an incentive provided to subscribe for or sell or purchase any financial instrument. All trading or investments you make must be pursuant to your own unprompted and informed self-directed decision. As such no Saxo Bank Group entity will have or be liable for any losses that you may sustain as a result of any investment decision made in reliance on information which is available on or as a result of the use of the Orders given and trades effected are deemed intended to be given or effected for the account of the customer with the Saxo Bank Group entity operating in the jurisdiction in which the customer resides and/or with whom the customer opened and maintains his/her trading account. When trading through your contracting Saxo Bank Group entity will be the counterparty to any trading entered into by you. does not contain (and should not be construed as containing) financial, investment, tax or trading advice or advice of any sort offered, recommended or endorsed by Saxo Bank Group and should not be construed as a record of ourtrading prices, or as an offer, incentive or solicitation for the subscription, sale or purchase in any financial instrument. To the extent that any content is construed as investment research, you must note and accept that the content was not intended to and has not been prepared in accordance with legal requirements designed to promote the independence of investment research and as such, would be considered as a marketing communication under relevant laws. Please read our disclaimers:
- Notification on Non-Independent Invetment Research
- Full disclaimer
- 沪ICP备13028953号-1

Check your inbox for a mail from us to fully activate your profile. No mail? Have us re-send your verification mail