Wednesday, March 21, 2007

Cocoa Makes a 4 Year High

I know most of you who are reading this blog do not trade cocoa, but I wanted to post the above chart because it is a significant breakout and I think it doesn't hurt to be aware of what other markets are doing.

Dry weather this year in the Ivory Coast, the world's leading producer of cocoa beans, is causing market participants to scale back their production
estimates. Some analysts are forecasting the upcoming midcrop harvest to be down 15-20% from last year. (Sounds like the movie trading places right?)

People are also now eating more and darker chocolate now that studies are suggesting the health benefits of dark chocolate.

Cocoa broke out to a 4 year high today and is also breaking out of a multi year trading range which can lead to much higher prices. I may have to stock up on the sweet stuff before prices double!

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