Mid-Week Wrap: 27th March 2024
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Market Mood
In a prolonged commodity price rally, market fundamentals such as supply and demand become less relevant, leading to abstract price movements. This phenomenon has occurred in the cocoa market, with cocoa futures exceeding $10,000 per metric ton in New York, driven by crop failures in West Africa. Despite record nominal prices, cocoa prices remain below 1970s peaks when adjusted for inflation. However, once prices detach from fundamentals, stopping a bull market becomes difficult, with potential broader implications.