Chocolate kisses new all-time highs

Cocoa futures prices made new all-time highs on Friday with the March cocoa futures soaring to $6,030 per metric ton before reversing course and trading lower.

Abnormally dry conditions in West Africa where more then 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 then double what they were a year ago, and according to Hershey CEO Michele Buck the chocolate maker’s earnings growth will be flat this year due to historically high cocoa prices.

Hershey 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 dropping $5.73 per barrel 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 $4.37per barrel to put it at $76.50 per barrel 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 per bushel, soybeans down $.0425 to $11.84 per bushel and kc wheat was down $.235 to $6.01 per bushel.

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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Opinions are solely the writers. Derrick Hermesch is a commodity futures broker with Paragon Investments LLC. This is not a solicitation of any order to buy or sell nor does it provide any recommendations regarding the market. Information contained herein is believed to be reliable but cannot be guaranteed as to its accuracy or completeness. Past performance is no guarantee of future results or profitability. Futures and options trading involve substantial risk of loss and is not suitable for all investors.