All delivery months of US cocoa futures have made daily-scale top extensions in the last few days. The market is near the upper end of a broad range and there are no longer-term signals that could inhibit bearishness so we advise a short sale now. The market is in a slight backwardation (nearby prices are higher than further out) showing that some shortage either exists or is anticipated. We do not want to risk getting caught in a short-squeeze, so as usual when short-selling commodities we advise selling a more distant month – September say, not July:
Elsewhere, there are two trades that should ordinarily ‘time-out’ about now – long S&P and short soya beans. In both cases there is a reason to hold on for more time as weekly-scale compressions have broken in the direction of these trades. Hang on – we will advise:
