10.11.2025 - Daily Cocoa Market Report

Cocoa Futures Recover Modestly as March Contracts Lead the Market

Cocoa futures began the week with a modest recovery after last week’s steep sell-off, as traders engaged in light short-covering and commercial buying near key technical support levels. The move reflected a pause in the prevailing bearish momentum rather than a fundamental shift in sentiment, but it confirmed that March contracts have now fully replaced December as the active benchmark in both New York and London.

On the ICE US exchange, March 2026 cocoa closed at 6,199 dollars per tonne, up 58 dollars or 0.9% from Friday’s 6,141 settlement. In London, March 2026 cocoa finished at 4,440 pounds per tonne, a gain of 24 pounds or 0.5%. The rise was moderate but psychologically important, marking the first session of stabilization after a week of heavy liquidation.

Traders described the session as “orderly but nervous,” with reduced speculative participation and an underlying tone of caution as the market assessed the strength of arrivals data and a weakening Harmattan signal across West Africa.

Certified Stocks

The certified stock data show that London warehouses are gradually rebuilding while U.S. inventories remain near historic lows. The transatlantic spread has narrowed somewhat, but tightness in U.S. deliverable supply still underpins prices in New York relative to Europe.

Volume and Open Interest Analysis

Trading activity in both exchanges reflected a transition week, as open interest shifted from December to March contracts. Total volume reached 41,959 lots in New York and 25,957 lots in London, both moderately above their recent daily averages.

A closer look at the composition of volume reveals that over two-thirds of London’s activity consisted of spread trading, primarily Dec–Mar rolls. This confirms that much of the flow was mechanical position adjustment rather than speculative buying. The elevated spread volume, combined with stable outright trading, suggests participants are maintaining exposure while reducing outright risk.

Open interest dynamics further illustrate this cautious tone. Recent data show that total open interest in New York had fallen sharply in early November during the liquidation phase, but it is now stabilizing. The steady volume, coupled with relatively unchanged open interest, implies that fresh positions are beginning to replace the long liquidation of previous weeks.

In London, open interest rose slightly as new hedges were added by the trade, particularly processors and exporters seeking coverage ahead of the main-crop shipping season. The latest COT report shows managed funds adding 3,746 new short positions in the week ending November 4, bringing their total to 19,194 contracts, while hedgers added 4,552 longs, resulting in a modest net commercial short of 6,582 contracts. This positioning points to an early stage of rebalancing: funds remain defensive, but commercial players are tentatively buying dips to secure forward supply.

Overall, the volume and open interest pattern is consistent with a market in consolidation. The heavy speculative liquidation seen in late October appears to have ended, but conviction remains low. Participants are holding flexible positions, waiting for clearer signals from arrivals data and forthcoming COT updates once U.S. reporting resumes.

Term Structure

The term structure indicates mild near-term tightness in the U.S. market, with the front-month premium reflecting strong spot demand from chocolate manufacturers who still require prompt delivery. In London, the flatter curve suggests more comfortable cover in Europe, with physical deliveries from West Africa resuming steadily as port bottlenecks ease.

West Africa Supply and Crop Development

Ivory Coast arrivals reached an estimated 411,000 tonnes by November 9, down 9.7% from 455,000 tonnes in the same period last season. However, weekly arrivals between November 3 and 9 totaled 107,000 tonnes, well above the 90,000 tonnes delivered during the same week last year. Exporters report that deliveries are accelerating as farmers take advantage of favorable drying weather and easier transportation conditions.

In Ghana and Nigeria, mid-season rains have eased, allowing pods to mature under ideal conditions of alternating sunshine and moisture. Farmers in western Ghana and southeastern Nigeria have expressed cautious optimism that 2026’s main crop could outperform earlier expectations if the Harmattan remains weak.

In interviews with Reuters, several Ivorian farmers described the current crop as “developing well, with heavy pods and fewer black-pod losses.” Many farmers expect harvest activity to continue strongly into January before tapering off by February, barring any abrupt dry-season onset. Warehouses in Divo and Abengourou are reported to be filling rapidly, signaling strong near-term supply but potentially pressuring quality if humidity persists.

Overall, weather and field reports support a more balanced supply outlook for late 2025 and early 2026, suggesting that while the market remains structurally tight, the immediate risk of an extreme shortage has diminished.

Weather and Harmattan Outlook

Satellite rainfall estimates from NOAA and RFE2 indicate that the first half of November has brought above-average precipitation to most of southern Ghana and western Ivory Coast. The forecasts for the week ahead show continued showers along the southern cocoa belt, keeping soil moisture high and minimizing early Harmattan intrusion.

Short-term conditions (1–2 weeks) remain dominated by moist maritime air with limited dust activity from the Sahel. Medium-term models project a delayed Harmattan onset toward late November or early December, consistent with El Niño-like atmospheric patterns that tend to favor weaker early dry-season winds.

From a historical perspective, late Harmattan years (such as 2006, 2016, and 2020) typically deliver larger main-crop outputs but with slightly lower bean quality due to prolonged humidity. If this year follows that pattern, cocoa output could surprise to the upside in the first quarter of 2026, even if drying and fermentation challenges increase near coastal regions.

Industry and Consumer Developments

In the industrial sector, chocolate manufacturers continue to navigate between high raw material costs and consumer price sensitivity. Despite recent corrections in cocoa futures, the raw ingredient remains roughly double its long-term average, prompting structural shifts in sourcing and product strategy.

SwissInfo reported that chocolate prices are unlikely to fall in the near term, as manufacturers opt for innovation and smaller product sizes instead of cutting retail prices. Companies are increasingly using recipe reformulation, portion control, and sustainability narratives to maintain consumer loyalty while offsetting input cost pressures.

Ritter Sport’s performance illustrates this dynamic vividly. The company has become the fastest-growing brand in Europe’s block-chocolate segment by combining local sourcing transparency and environmental branding with mid-premium pricing. Its success suggests that consumers remain willing to pay more for perceived quality and ethical value, even as inflation bites.

Large manufacturers such as Barry Callebaut, Cargill, and Mondelez are simultaneously hedging cocoa inputs and exploring alternative ingredients. Barry Callebaut’s partnership with Planet A Foods to scale ChoViva, a sunflower-based cocoa substitute, underscores a broader trend toward supply diversification. These efforts are not yet large enough to materially affect global demand but mark an inflection point in the industry’s long-term adaptation to elevated cocoa costs.

Overall, the demand side of the market remains resilient but selective. Premium and ethical brands are thriving, while mass-market consumption has slowed, particularly in cost-sensitive regions such as parts of Asia and Eastern Europe. The next test for the sector will come during the Christmas and Valentine’s Day periods, when retailers gauge whether price increases have reached their limit.

Market Interpretation

Monday’s session confirmed that the cocoa market is stabilizing after the early-November correction. Price behavior reflected technical normalization rather than renewed speculative enthusiasm. Commercial buyers have re-entered the market selectively, while speculative traders remain cautious, waiting for U.S. COT data and clearer signs of direction.

With arrivals improving and the Harmattan still weak, the fundamental tone is more balanced than it was two weeks ago. Nevertheless, structural tightness in certified stocks and the slow pace of supply recovery prevent any sustained bearish shift. The market appears set for a consolidation phase between 6,100 and 6,250 dollars in New York and 4,380 to 4,460 pounds in London.

Outlook

Short-term trading is likely to remain range-bound, with moderate upside potential if weather continues to favor supply without oversaturating drying conditions. Key resistance sits near 6,250 dollars in New York and 4,460 pounds in London. Support lies at 6,100 and 4,380 respectively.

Over the coming weeks, traders will closely monitor the speed of Ivory Coast arrivals, the evolution of mid-crop weather patterns, and any changes in speculative positioning. Improved rainfall and weak Harmattan signals lean slightly bearish, but persistent low stocks and steady consumer demand keep price floors high by historical standards.

Weekly Summary Box

Interpretation:
The start of the week brought calm after a volatile early November. Rising arrivals and improving rainfall eased supply fears, while traders focused on technical stabilization and roll activity. Although the short-term tone is steady, the broader market remains finely balanced between seasonal supply optimism and structural tightness.

Unless late-month weather turns unexpectedly dry or demand weakens sharply, cocoa is likely to remain in a controlled, range-bound consolidation phase as the market digests fresh fundamental data.