Cocoa futures

[Picaso]

Yeah, I kinda found about that the hard way. Shorting here, shorting there, shorting everywhere. I swear I'm never eating another chocolate, ever!

Oh gawd, won't you save this lost soul???

I doubt it's any consolation to you, but I've had a similar situation lately with USDJPY

Now I think how much I would have made IF ONLY I HAD FOLLOWED THE TREND and it makes me want to pull my hair...

 

[schizo]

I doubt it's any consolation to you

It's not. And I bet this damn thing tanks hard now that I'm all out.

IF ONLY I HAD FOLLOWED THE TREND

You and I are like hopeless drunks. Knowing is one thing. Following it is another.

 

[nitrene]

If Cocoa supply goes down 50% shouldn't the price be around $6,000 (it was ~$3,000 before Covid hit)? Why is it $11,000+?

 

[newbunch]

If Cocoa supply goes down 50% shouldn't the price be around $6,000 (it was ~$3,000 before Covid hit)? Why is it $11,000+?

Depends on the elasticity of demand.

 

[Snuskpelle]

Depends on the elasticity of demand.

Nice memory from my high school economics course. Simply put not enough people are prepared to change their habit of buying cocoa based products unless it's a heck of a lot more expensive, especially since a lot of products are not pure cocoa and will not increase in price as dramatically as cocoa does relatively speaking. Btw for someone seeing them for the first time: those perfectly straight lines are of course abstract made up examples to illustrate the point, not that the demand function of price is necessarily linear in reality.

 

[nitrene]

Nice memory from my high school economics course. Simply put not enough people are prepared to change their habit of buying cocoa based products unless it's a heck of a lot more expensive, especially since a lot of products are not pure cocoa and will not increase in price as dramatically as cocoa does relatively speaking. Btw for someone seeing them for the first time: those perfectly straight lines are of course abstract made up examples to illustrate the point, not that the demand function of price is necessarily linear in reality.

Yeah that makes sense. Most people love their chocolate products. I remember during the pandemic that Nutella prices skyrocketed in the aftermath of shortages.

The only pure play short I could come up with is shorting Hersheys. It does keep going down so it has worked so far.

 

[schizo]

The only pure play short I could come up with is shorting Hersheys. It does keep going down so it has worked so far.

They must have read your post. Yowza, this is the biggest plunge to date!

 

[nitrene]

They must have read your post. Yowza, this is the biggest plunge to date!

View attachment 339229

Looks like the uptrend is broken, of course it ocould just go back to the Feb highs of $6,500 which is what I would have thought with a 50% supply shock. Maybe demand destruction is finally here.

 

[long]

Looks like the uptrend is broken, of course it ocould just go back to the Feb highs of $6,500 which is what I would have thought with a 50% supply shock. Maybe demand destruction is finally here.

I haven’t noticed the price of chocolate going up at the grocery store. I’d say that demand for the end products hasn’t changed yet. Be on the lookout for a revision of supply estimates.

 

[SunTrader]

From MorningBrew yesterday:-

Stat: Chocolate may not be on its way to becoming a bigger luxury flex than watches or handbags after all, as cocoa prices appear to be coming out of their extra-dark phase. Since hitting a record high on April 19, the price of cocoa futures has slumped more than 20%, per Bloomberg. Prices plunged in both New York and London yesterday, creating the commodity’s biggest intraday price drop since 1960 in New York and settling at its lowest price in a month, Bloomberg reports. Driving the slump are traders pulling out as margin requirements have climbed, but some agriculture watchers caution that the bean shortage that caused the high prices remains ongoing.