Cocoa prices fell sharply over the past year, and Hershey’s (NYSE:HSY) stock has done well during that time. That trend should reverse as cocoa prices are most likely going to bottom out.
Commercial hedgers (smart money) are net long 31,486 cocoa futures contracts as of 06.27.2017. Compared against the last two decades, this is the largest net long position ever for these investors. The last time they were this net long was in April 2003 with over 29,453 contracts net long. On the other hand, non-commercials (dumb money) are net short 38,256 contracts. Compared against the last two decades, this is the largest net short position for these trend traders. Before this year, the last time they were this short was in 2003.
