07Nov1:31 pmEST

Let's Start a Cocoa Farm

In addition to the move in natural gas this week, another under-the-radar commodity is cocoa. 

The NIB, admittedly a thinly-traded ETN, still gives a pretty good idea of the resurgent strength in cocoa. On the monthly chart, below, the signs of a major bottom in place, beyond the plethora of articles around the world about the dearth of cocoa farmers and overall lack of willingness for young people to enter the business due to low prices for years (ah, the dynamics of supply and demand). 

Indeed, the volume (bottom pane of chart) surge over the last eight months or so after a devastating bear market seems to jive with the notion of a washout and subsequent inflection point. 

Also note price clearing the $26 level to confirm a major base bottom breakout. 

A new cocoa bull run makes sense on several levels, with demand for dark chocolate high and the low prices for years causing supply to shrink. 

As for equities, the small cap weakness is still causing some friction, as well as PCLN getting whacked, even as dip-buyers are giving it a shot as I write this.

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