On Friday, Sep. 26, the most active Dec-22 NY cocoa contract closed below the lower Bollinger Band and prior retracement support below $2,290. The contract traded lower still Monday to a fresh low of $2,243 and tested key psychological support around $2,200 on additional bearishness from an ever-strengthening U.S. dollar. The contract rebounded Tuesday back above the lower Bollinger Band before settling lower at $2,282 in an inside session Wednesday, above support near $2,280.

Further support for the December contract may be below $2,250, $2,225, and $2,200. Resistance may be from $2,300 to $2,310 and below $2,340 and $2,360. Technically, RSI is strongly bullish and MACD amply bearish. The stochastic showed a bullish crossover. Presumably, further dollar strength will continue to temper upside potential.

For September to date, managed money in NY cocoa futures dumped longs and added to shorts, further enlarging its net short commitments as of last report. Noncommercial commitments haven’t been this net short since a brief dip in early July.

Conversely, two-decade lows for the pound sterling lifted London cocoa futures. Benchmark Dec-22 London cocoa rallied this week, closing Wednesday at a contract high of £1,932, a 19-month high for continuous London futures. This was the second straight close above the upper Bollinger Band and well above prior resistance below £1,900. Support may be above £1,885, £1,870, and £1855, resistance around £1,940 and £1,960. RSI is bearish.

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NY cocoa net noncommercial commitments

Source: CFTC, McKeany-Flavell, DTN