Cocoa futures prices made new all-time highs on Friday with the March cocoa futures soaring to $6,030/metric ton before reversing course and trading lower.
Abnormally dry conditions in West Africa, where more than half of the world’s cocoa is produced in the Ivory Coast, and Ghana is the fundamental push behind this price move.
Cocoa prices are more than double what they were a year ago, and according to Hershey’s President Michele Buck, the chocolate maker’s earnings growth will be flat this year due to historically high cocoa prices.
Hershey’s reported fourth quarter net income of $349 million, a nearly 12% decrease compared to the same period a year ago.
Crude oil breaks, then brakes
Headlines of trouble in the Middle East were an everyday occurrence last week and the crude oil market paid them no mind with March crude futures dropped $5.73/brl, putting in an outside reversal lower on a weekly chart.
This week it doesn’t appear anything material has changed in the Middle East, but the headlines have been fewer, and March crude oil rallied $4.37/brl to put it at $76.50/brl by midday Friday.
The old adage of “buy the rumor sell the fact” had an additional “buy the fact back” added to it that left several traders scratching their heads.
Grains slide
By midday Friday, nearby corn futures were down $.13 on the week to $4.295/bu, soybeans down $.0425 to $11.84/bu and KC wheat down $.235 to $6.01/bu.
The February WASDE report released this week was not friendly to price, with projected ending stocks of all grain shown to be increasing slightly adding to the already healthy supply at current prices.
Without any surprises, the grain markets continued their march of sideways to lower.
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