Cocoa Markets Diverge as New York Weakens and London Advances (24 July 2026)

New York September cocoa traded through a volatile two-way session on Friday. After opening at 5,320, the contract came under early pressure and fell to an intraday low of 5,227, a decline of 93 points or 1.75% from the opening level. Prices then recovered sharply, advancing through 5,400 to a session high of 5,438, which was 211 points or 4.04% above the intraday low and 2.22% above the opening price. The rebound failed to hold, however, as renewed selling pushed the contract back toward 5,300 during the final part of the session. September closed at at price of 5,331, only 11 points or 0.21% above the opening level, but 107 points or 1.97% below the daily high. Compared with the 23 July close of 5,367, the contract declined by 36 points or 0.67%, while officially settling at 5,376. The price action reflected a strong recovery from the session low but continued resistance above 5,400 and an inability to sustain bullish momentum.

News and Fundamental Developments

Market news remained mixed over the weekend. A broker report published on Friday maintained that El Niño-related risk premiums are likely to build progressively through the second half of 2026, as West African cocoa enters a critical flowering and pod-development period. This provides medium-term support, although the immediate supply picture remains more comfortable. Côte d’Ivoire port arrivals had reached 2.10 million tonnes by 19 July, 21% above the same stage last season, while Nigerian cocoa exports increased by 30% year on year in June to 18,922 tonnes. Early Ivorian crop surveys continued to indicate below-average cherelle formation and a possible 2026/27 crop of around 1.8 million tonnes, compared with approximately 2.2 million tonnes in 2025/26, although more recent field assessments reportedly showed improving pod counts.

Friday’s price recovery was also attributed partly to pre-weekend short covering and a weaker US dollar. New US Section 301 tariffs announced on Thursday were not expected to affect cocoa because food products were excluded, limiting the risk of an additional import-cost shock for the US chocolate industry. However, ICE US cocoa stocks rose to a two-year high of 3,319,249 bags, maintaining bearish pressure on the nearby supply outlook.

Côte d’Ivoire announced a new cocoa-processing investment in San-Pédro on Friday. The €15 million CocoaTech Côte d’Ivoire facility will have an initial annual capacity of 15,000 tonnes, expandable to 30,000 tonnes, and is expected to create 110 direct and more than 250 indirect jobs. The factory will be supplied by a cooperative representing approximately 5,000 producers and is intended to operate through an integrated and traceable supply chain. The project has limited immediate relevance for futures prices but supports Côte d’Ivoire’s longer-term strategy of processing more cocoa domestically rather than exporting raw beans.

In Nigeria, industry stakeholders called on Monday for greater investment in production, plantation rehabilitation and local processing. The Cocoa Association of Nigeria expects 2025/26 output of approximately 305,000 tonnes, down 11% from an estimated 344,000 tonnes in the previous season. Stakeholders argued that Nigeria should work toward the government’s medium-term production target of 500,000 tonnes while diversifying export destinations and expanding domestic processing capacity. The development is strategically relevant but is unlikely to affect near-term global availability without substantial investment and several years of implementation.

The Côte d’Ivoire–Ghana Cocoa Initiative communiqué supplied separately was issued on 22 July, slightly before the Friday-to-Monday search period. It remains relevant because the proposed inclusion of Nigeria and Cameroon would bring countries representing close to 75% of global cocoa production into a shared agenda covering farmgate pricing, local processing, disease control and regional cocoa trade.

A separate industry development involved a US lawsuit alleging that Lindt misled consumers regarding human-rights and child-labour commitments in its cocoa supply chain. This represents an ESG and reputational issue for the chocolate sector but is not currently a material futures-market driver.

Weather Outlook

The seven-day outlook from 27 July to 2 August points to widespread and recurring rainfall across the West African cocoa belt. Côte d’Ivoire and Ghana are expected to remain mostly cloudy, with showers or periods of rain on most days and daytime temperatures generally between 27°C and 30°C. Rainfall is forecast to be more persistent across Nigeria and Cameroon, where daily rain or showers are likely and temperatures should remain slightly cooler at around 25°C–28°C.

The forecast indicates moderate to locally heavy rainfall across much of the cocoa-growing region, with wetter pockets extending from western Côte d’Ivoire and Liberia into parts of Nigeria and Cameroon. No broad or severe dryness signal is visible for the main producing areas during the forecast period.

The moisture should maintain favourable soil conditions and support pod development, but repeated rainfall, persistent cloud cover and high humidity could restrict fieldwork and increase fungal-disease pressure. Black pod pathogens thrive under wet and humid conditions and can spread through rainfall and water splash, making disease management increasingly important where heavier precipitation persists.

The forecast is supportive for crop moisture but increasingly concerning for disease risk. The immediate weather signal is therefore mixed: limited drought stress is favourable for production, while prolonged wetness and reduced sunshine could become a more important threat if the pattern continues beyond the coming week.

Futures Performance

Cocoa futures ended Friday with a pronounced divergence between the two exchanges. All four monitored New York contracts declined, recording losses of between 35 and 41 points, equivalent to approximately 0.62%–0.74%. In contrast, all four London contracts advanced by between 33 and 45 points, or approximately 0.83%–1.09%.

The session therefore reflected continued weakness in New York alongside broad-based strength in London. Although New York prices recovered considerably from their intraday lows, the rebound was insufficient to return them above the previous day’s closing levels. London contracts performed more strongly and generally finished within the upper portion of their daily trading ranges.

New York cocoa

In New York, contracts finished below their 23 July levels. September 2026 declined by 36 points, falling from 5,367 to 5,331, equivalent to a decrease of 0.67%. December 2026 and March 2027 recorded the largest absolute losses, with both contracts declining by 41 points. December fell from 5,508 to 5,467, or 0.74%, while March moved from 5,610 to 5,569, a decrease of 0.73%.

May 2027 was the most resilient contract, declining by 35 points, or 0.62%, from 5,613 to 5,578. The relatively smaller loss in May indicates that selling pressure was slightly more concentrated in the front and middle portions of the curve.

The New York forward curve remained upward sloping. The December-to-September premium narrowed from 141 points on 23 July to 136 points on 24 July. The March-to-December premium remained unchanged at 102 points, while the May-to-March premium widened from 3 points to 9 points. This suggests that the far end of the monitored curve held up somewhat better than the nearby and middle contracts.

Despite the negative day-on-day performance, the contracts recovered significantly from their intraday lows. September closed 104 points above its session low of 5,227, while December finished 96 points above its low of 5,371. March and May closed 103 and 101 points above their respective lows. Nevertheless, the contracts finished around the middle of their daily ranges, indicating that the late recovery only partially offset the earlier selling pressure.

London cocoa

London cocoa recorded broad-based gains across the four monitored contracts. September 2026 increased by 33 points, rising from 3,981 to 4,014, equivalent to an advance of 0.83%. December gained 40 points, or 0.99%, moving from 4,041 to 4,081.

The strongest performance was concentrated in the deferred contracts. March 2027 advanced by 42 points, or 1.02%, from 4,121 to 4,163. May 2027 recorded the largest increase in both absolute and percentage terms, gaining 45 points, or 1.09%, to close at 4,171.

The London forward curve also remained upward sloping and became moderately steeper. The December-to-September premium widened from 60 points on 23 July to 67 points on 24 July. The March-to-December premium increased from 80 to 82 points, while the May-to-March premium expanded from 5 to 8 points. The widening of all three monitored spreads reflects the comparatively stronger performance of deferred contracts.

London prices also recovered firmly from their intraday lows. September closed 95 points above its low, while December and March each finished 102 points above their respective lows. May closed 109 points above its session low and only 27 points below the daily high. Unlike New York, the London contracts generally finished in the upper portion of their trading ranges, reinforcing the stronger tone of the London market.

EFP, EFS and Spread Activity

In New York, EFP activity totalled 487 lots and EFS activity reached 660 lots, entirely concentrated in September and December 2026. December dominated both categories, accounting for 309 EFP lots and 457 EFS lots, or approximately 63% and 69% of the respective totals.

Spread volume was substantial at 33,336 lots, equivalent to about 72% of total reported volume of 46,210 lots. December led with 13,515 spread lots, followed by September with 10,802 and March 2027 with 5,572. September and December together represented almost 73% of all spread activity.

In London, EFP activity was higher at 1,329 lots, with no EFS transactions reported. December accounted for 1,054 EFP lots, or approximately 79% of the total, while September contributed the remaining 275 lots. Spread volume reached 12,670 lots, equivalent to about 68% of total reported volume of 18,744 lots. December again led with 4,584 lots, followed by March 2027 with 3,608 and September with 2,045.

The high proportion of spread trading on both exchanges indicates that Friday’s activity was driven primarily by curve positioning, contract rolls and hedge adjustments rather than strong outright directional conviction. The concentration in September and December points to increasing attention on the Sep–Dec transition, with December becoming the main liquidity and risk-management contract.

In New York, the combination of lower prices and heavy spread activity suggests that part of the decline reflected position restructuring rather than purely aggressive outright selling. The EFS volume also indicates meaningful institutional or commercial swap-related hedging. In London, the comparatively high EFP activity suggests stronger involvement from physical-market participants, particularly around the December contract. However, EFP and EFS activity is not inherently bullish or bearish and should be interpreted alongside price action, open interest and movements in the nearby spreads.

US–UK Spread

(Sep Contract)

$5,331 − (£4,014 x 1.332$/£) =$-15ton (down from $72ton)

Volume and Open Interest

New York volume increased sharply to 46,210 lots, up 33.5% from 34,602 lots on 23 July and around 11% above the recent nine-session average. The stronger turnover indicates significantly higher participation during Friday’s decline. However, with spread transactions representing about 72% of volume, much of the increase appears to have reflected contract rolls, hedge adjustments and curve positioning rather than purely outright bearish selling.

New York cocoa

London volume declined by 11.6% to 18,744 lots, the lowest daily total shown since 3 July. The advance in London prices therefore occurred on relatively light participation, reducing the strength of the bullish confirmation and suggesting that spread and commercial activity played an important role in the move.

London cocoa

The latest figures, for 23 July, showed New York open interest declining marginally by 160 lots to 200,269, while London open interest fell by 174 lots to 227,960. These small changes indicate limited net position creation ahead of Friday’s session and support the interpretation that recent activity was driven mainly by position restructuring rather than a major build-up of new directional exposure.

Commitments of Traders

New York cocoa

Non-commercial traders remained net short by 13,050 contracts, but their position became considerably less bearish during the week. Short positions fell by 5,240 contracts, while longs increased by only 225, producing a 5,465-contract improvement in the speculative net position.

The adjustment was therefore driven predominantly by short covering rather than fresh bullish buying. Open interest declined by 3,697 contracts, reinforcing the interpretation that traders were reducing existing exposure rather than building substantial new long positions.

Commercial traders remained net long by 11,136 contracts, but their net position weakened by 5,801. Commercial longs declined by 1,896 contracts, while shorts increased by 3,905, indicating greater selling or hedging activity from the commercial category.

New York report was less bearish but not decisively bullish. Speculative selling pressure eased significantly, creating some potential support for prices, but the absence of meaningful new long accumulation and the increase in commercial shorts limited the strength of the signal.

London cocoa

London producers, merchants and users held a net short position of 28,627 contracts, broadly consistent with physical-market participants using futures to hedge cocoa inventories, purchases or future production. This exposure was largely balanced by swap dealers, who held a net long position of 28,107 contracts.

Managed money was only modestly net short at 1,615 contracts. However, the category also held 38,287 spreading positions, substantially larger than its outright long and short exposure. Other reportables showed an even greater concentration in spread positions, with 50,838 contracts against a relatively small net long position of 1,070.

The London positioning therefore reflected limited outright directional conviction and a strong concentration in spread and relative-value strategies. Managed money retained a mildly bearish bias, but the net short position was small relative to total open interest. The balance between producer shorts and swap-dealer longs indicates that commercial hedging and intermediary activity remained the dominant forces in the market.

Exchange Trading Volume

The measure is not a complete regional stock-to-grind ratio, as it includes only exchange-certified cocoa held at U.S. and EU delivery ports and excludes commercial inventories outside the ICE warehouse system. North America NCA grindings cover processors across North America, while ICE U.S. certified stocks are stored at U.S. delivery ports. ECA reports bean usage in European countries and London-certified cocoa is held in European and UK delivery locations.

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Tomorrow's Outlook

New York cocoa is expected to remain under short-term pressure, although oversold momentum could generate an initial technical rebound. On the daily chart, the 9-day moving average is crossing below the 21-day moving average, creating a bearish crossover and establishing the 5,450–5,550 area as an important dynamic resistance zone.

Any recovery into this area may therefore attract renewed selling unless prices can close decisively above both moving averages. Failure to overcome the resistance zone would keep attention on 5,300, with a break below that level exposing 5,250–5,200.

The most likely scenario is continued consolidation with a bearish bias. A temporary rebound remains possible, but the technical outlook would not improve materially until the market reclaims and holds above approximately 5,550.

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.