Weekly cocoa market 11/16/2020.

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Last week, ICE U.S. cocoa futures closed higher at $2,388 a ton.
Hopes for a vaccine are fuelling markets, Moderna announced very encouraging results on Monday. The pandemic is not weakening, we have just surpassed 54 million cases worldwide, with more than 1.320 million deaths . Faced with the second wave, Europe has been confined. The United States is the most affected country with more than 246,000 deaths and more than 11 million cases, and is also taking restrictive measures such as in New Jersey and Michigan.
The 2020/21 season is off to a strong start with arrivals in Ivorian ports of 485K tons as of November 8, against 362K tons at the same period the previous season. The dry period in West Africa begins in mid-November and producers are confident. Moisture in the soils should allow for an abundant harvest until the end of January-February. Crushing reports for the third quarter were down 4.7% in Europe, down 4.02% in the USA, and down 10.1% in Asia. Reconfinement and the closure of bars and restaurants in Europe will undoubtedly weigh on the fourth quarter.
Tensions in Ivory Coast following the presidential election have resulted in 85 deaths and 500 injured since August. President Ouattara was re-elected with more than 94% of the votes. The opposition does not recognize this election, deeming a third term unconstitutional, and to call for a transitional government. The government sent police units to surround the homes of opposition leaders, including that of Henri Konan Bédié, the former president. Guillaume Soro, in exile in France, called for an army uprising. Opposition spokesman Affi N'Guessan was arrested and investigated for "conspiracy against the authority of the state" and "acts of terrorism". The Constitutional Council officially validated the election. President Ouattara and Henri Bédié, former president and opposition leader, met for an exchange of about 40 minutes, both wanting to work for peace. Ouattara noted the handing over of a passport to Laurent Gbagbo, a further step toward reconciliation.


Ivory Coast and Ghana experienced above normal rainfall in October with an average of more than 150mm. Last week's rains were also above the five-year average in most of Ivory Coast's cocoa-producing regions, with about 25-50 mm of rainfall. Forecasts in Ivory Coast and Ghana are now normal for next week, with rainfall probabilities of 25 to 50 mm. It should also be noted that the dry season usually starts in mid-November, early December.


Cocoa stocks are down to 3254 against 3361 thousand 60 kg bags the previous week. ICE US and EU cocoa stocks rose above last season's stocks at the same time.


The DXY index representing the Dollar against a basket of foreign currencies closed last week up to 92.755, after a sharp decline in early November. The U.S. elections will continue to bring volatility to the currency market. Joe Biden will be sworn in on January 20, the Senate remains Republican for now, but a second round will be held on January 5 in Georgia. There is still a lot of uncertainty about the size and date of the famous plan to support the American economy. The Fed has announced that it will increase its "firepower" if necessary. Forex traders therefore anticipate an increase in the money supply.
The pandemic is not weakening, Europe has reconfirmed itself in the face of the second wave, the United States is also taking new measures of restrictions in certain states. The hope of a vaccine, with the announcement of Pfizer , calms the markets and prevents for the moment the dollar from playing its role as a safe haven. Caution is still called for, however, as many questions about vaccines remain unanswered. The dollar has a strong influence on the price of raw materials, and it will be very difficult to predict its evolution in the coming months.
A low dollar is generally favorable to the dollar-denominated raw materials market.


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