Cocoa Extends Losses as Demand Concerns Offset Weather Risks (4 June 2026)

The cocoa market came under renewed pressure on 4 June, with both New York and London futures extending the previous session's decline and surrendering a significant portion of the gains achieved during the 2 June recovery rally. July 2026 futures settled 107 points lower in New York and 68 points lower in London, representing daily declines of 2.65% and 2.20%, respectively. Across the forward curves, losses ranged from 1.7% to 2.7% in New York and 1.6% to 2.3% in London, highlighting broad-based weakness throughout both markets. Despite the softer price action, trading activity remained robust, with strong futures volumes, active spread trading, and elevated open interest levels indicating continued market engagement.

Attention remained focused on West Africa, where weather developments continue to be monitored closely ahead of the main crop development period. While recent rainfall has generally supported crop conditions across major producing regions, uncertainty remains regarding pod development and the implications for the 2026/27 supply outlook. At the same time, traders continue to assess the impact of historically high cocoa prices on consumer demand, particularly in Europe and North America.

Additional support for the market stems from weather-related risks. Traders are closely monitoring the potential development of El Niño conditions, which have historically been associated with warmer and drier weather across parts of West Africa. Such a pattern could adversely affect cocoa flowering and pod development, potentially tightening future supplies. Consequently, weather concerns continue to provide underlying support to longer-term cocoa prices and may help limit downside potential despite the recent correction.

Futures Performance

The cocoa market experienced a much sharper decline on 4 June than the relatively modest pullback observed on 3 June. While the previous session was characterized by limited profit-taking following the strong rally of 2 June, the 4 June selloff resulted in losses of approximately 2–3% across both the New York and London cocoa curves. The magnitude of the move suggests a more decisive shift in short-term sentiment, although the structure of the decline provides important clues regarding market positioning.

New York Cocoa (CC)

In New York, losses ranged from 1.9% in the May 2027 contract to 2.7% in the nearby July 2026 contract. The concentration of selling pressure in the front months indicates that market participants were reducing exposure to near-term bullish expectations rather than aggressively repricing the longer-term supply outlook. Deferred contracts remained relatively resilient, with percentage declines gradually decreasing further along the curve. This pattern is consistent with liquidation of speculative length and the unwinding of nearby risk premiums.

London Cocoa (C)

London cocoa futures displayed an even weaker performance. The July 2026 contract declined by 2.9%, while losses across the rest of the curve ranged between 2.1% and 2.8%. The fact that London underperformed New York, particularly in the nearby contracts, suggests relatively greater selling pressure in the European market. This may reflect weaker local demand expectations, positioning adjustments, or temporary pressure on the London/New York spread relationship.

EFP, EFS and Spread Activity

Trading activity remained robust despite the sharp decline in cocoa prices. Total volume reached 35,937 contracts in New York and 35,335 contracts in London, indicating strong market participation during the selloff.

EFP activity remained concentrated in the nearby contracts, with 458 transactions recorded in New York and 358 in London. This suggests continued commercial hedging and physical market activity despite weaker prices.

EFS activity was significantly higher in New York, where 717 transactions were recorded compared with 120 in London. The elevated EFS volume points to active management of OTC cocoa exposures and increased participation from financial market participants.

Spread trading accounted for a substantial share of total activity, reaching 20,488 contracts in New York and 26,132 contracts in London. Spread volume represented approximately 57% of total volume in New York and 74% in London, highlighting extensive curve repositioning and rolling activity.

US–UK July Spread

$3,929 − (£3,000 x 1.342$/£) =$-97ton (up from $-111)

Volume and Open Interest

New York Cocoa (CC)

London Cocoa (C)

Trading activity increased sharply during the 2 June rally, with volume reaching 57,618 contracts in New York and 39,275 contracts in London, the highest levels recorded during the period. The surge in activity reflected strong participation in the recovery from the late-May lows and suggested that buyers were actively re-entering the market.

Open interest remained elevated throughout the period. In New York, open interest held above 205,000 contracts, while London open interest remained above 223,000 contracts and reached a period high of 224,275 contracts on 3 June. The resilience of open interest indicates that market participants continued to maintain positions despite increased price volatility.

Following the rally, volumes moderated as prices retreated on 3–4 June. New York volume declined from 57,618 contracts on 2 June to 35,937 contracts on 4 June, while London volume fell from 39,275 to 35,335 contracts. Although activity slowed, volumes remained broadly in line with recent averages, suggesting continued engagement from both commercial and speculative participants.

The combination of elevated open interest and healthy trading volumes points to a market that remains well-supported from a participation perspective. The recent pullback has not been accompanied by a significant reduction in market exposure, indicating that traders continue to monitor cocoa's underlying fundamental risks despite the near-term price correction.

Exchange Trading Volume

These figures refer only to ICE Deliverable Stocks (Exchange-Visible)

Readers can explore detailed cocoa market datasets, futures statistics, and historical indicators in the CocoaIntel Data Hub:

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Cocoa Market Outlook for Friday

For Friday, cocoa futures appear likely to remain in a consolidation phase following the sharp decline on 4 June. Technical indicators suggest that downside momentum has moderated, but there is currently little evidence of strong buying interest capable of driving a sustained recovery. The market is trading below key moving averages and momentum indicators remain mildly bearish, which favors a cautious tone. However, the absence of heavy liquidation volume and the persistence of elevated open interest indicate that market participants have not abandoned positions despite the recent weakness. As a result, the most likely outcome is a range-bound session with a slight downside bias, as traders assess whether support around the 3,900 level can hold. A successful defense of this area could encourage short covering and a modest rebound, while a break below support would likely expose the market to further selling pressure toward the late-May lows.

If you notice any discrepancies in these figures or have extra information, please email [email protected] or leave a comment – corrections and additional insights are always welcome.