Cocoa Prices Recover After Sharp Sell-Off, Supported by Stronger North American Grindings (17 July 2026)

Cocoa futures rebounded on Friday, 17 July, after the sharp losses recorded in the previous session. In New York, the September 2026 contract opened at 5,421 USD/tonne and initially extended the previous day’s weakness to an intraday low of 5,393 USD/tonne. Buying then returned, lifting prices to a high of 5,767 USD/tonne before the contract closed at 5,610 USD/tonne. This represented a daily gain of 169 USD, or 3.11%, from Thursday’s close of 5,441 USD/tonne.

London cocoa followed a similar pattern. The September contract opened at 4,047 GBP/tonne, fell briefly to 3,960 GBP/tonne and subsequently recovered to an intraday high of 4,285 GBP/tonne. It closed at 4,102 GBP/tonne, up 144 GBP, or 3.64%, from 3,958 GBP/tonne on 16 July.

North American Grindings Support Friday’s Recovery

North American cocoa grindings rose to 109,659 tonnes in the second quarter of 2026, up 7.65% from 101,865 tonnes a year earlier, according to data released by the National Confectioners Association after Thursday’s market close. Processing also increased by approximately 3.37% from the 106,087 tonnes reported in the first quarter.

Because the figures were published after the sharp price decline on Thursday, they were available to the market for the first time during Friday’s session. The stronger year-on-year processing result may therefore have contributed to the recovery in cocoa futures by easing concerns that high prices had caused a more severe contraction in North American demand.

Cocoa Futures Sink as Rising Inventories Weigh on Market

Cocoa futures plunged as rising exchange stocks, flat quarterly grindings and modest annual growth overshadowed strong regional data on Thursday.

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African Producers Adopt Abuja Declaration, but Nigeria Rules Out Export Ban

Nigeria, Ghana, Côte d’Ivoire and Cameroon agreed to deepen cooperation under the Abuja Declaration, with the objective of expanding cocoa processing at origin, improving farmer earnings and retaining a larger share of the cocoa value chain within Africa. The participating countries intend to coordinate their approach to international markets, strengthen standards and traceability, and prepare for the EU Deforestation Regulation, which is scheduled to apply to larger operators from 30 December 2026.

However, several initial reports incorrectly presented the initiative as an immediate ban on raw cocoa exports. Nigeria’s Minister of Agriculture and Food Security, Abubakar Kyari, clarified that raw bean exports would continue and stated that the government’s objective was value addition rather than an export prohibition. The policy is therefore better understood as a gradual effort to increase domestic grinding, processing and manufacturing capacity, rather than an abrupt withdrawal of Nigerian beans from the international market.

European Financing Supports Nigerian Cocoa Processing

Nigeria’s Bank of Industry announced that it had secured a €60 million credit facility from the European Investment Bank, forming part of a wider €85 million EIB–BoI programme. The funds are intended to support cocoa and dairy value addition, including investment in processing, ingredients and chocolate manufacturing.

The financing gives the Abuja initiative more practical substance by providing capital for processing investment. However, no detailed breakdown has yet been published showing how much of the facility will be allocated specifically to cocoa rather than dairy, or when the financed processing capacity will become operational.

Large Delivery Against the July London Cocoa Contract

A total of 37,370 tonnes of cocoa was tendered against the expiring ICE July London cocoa contract on Friday. As each London cocoa futures contract represents ten tonnes, the delivery was equivalent to approximately 3,737 futures lots.

The sizeable tender confirms that a substantial quantity of exchange-grade cocoa was available for delivery through the ICE warehouse system. Nevertheless, the transaction initially represents a transfer of warehouse warrants and ownership; it does not necessarily mean that the cocoa will immediately leave certified stocks. Its market impact will depend on the origins, quality and age of the beans and whether the receivers subsequently withdraw them for processing.

West African Weather Outlook: 20–27 July

The seven-day outlook indicates continued seasonal rainfall across the main West African cocoa belt. Weather models shows generally moderate totals across Côte d’Ivoire and Ghana, with the selected location in the Ivorian cocoa belt receiving approximately 30 mm through 27 July. Higher accumulations are indicated over parts of southern Nigeria, coastal Cameroon, Liberia and Sierra Leone.

In Côte d’Ivoire, showers are expected on most days. Coastal areas around San Pedro should receive mainly intermittent morning rainfall, while the interior cocoa regions around Daloa are forecast to experience more frequent rain and occasional thunderstorms. Temperatures should remain moderate, with daytime highs generally between 27°C and 30°C.

Ghana’s cocoa-growing areas are also expected to remain cloudy with recurring light-to-moderate showers. Around Kumasi, rainfall is forecast on most days, but there is no clear indication of prolonged or exceptionally heavy precipitation. Conditions should therefore remain broadly favourable for soil moisture and pod development.

Rainfall is expected to be more persistent in Nigeria, where parts of the southwestern cocoa belt may experience repeated periods of rain and thunderstorms, particularly from Tuesday through Thursday. Cameroon should also remain cloudy with regular rainfall, although daily totals may be less intense than in parts of Nigeria.

Futures Performance

New York Cocoa

London Cocoa

Cocoa futures staged a broad recovery on Friday, 17 July, following the severe sell-off recorded during the previous session. In New York, September cocoa gained 3.11% to close at 5,610 USD/tonne, while December advanced 2.97% to 5,753 USD/tonne. Deferred contracts also recovered, with March and May rising by 2.81% and 2.91%, respectively.

London cocoa recorded an even stronger rebound. September gained 3.64% to close at 4,102 GBP/tonne, while December rose 3.76% to 4,163 GBP/tonne. March advanced 3.65%, and May increased by 3.31%.

The gains across both nearby and deferred contracts indicate that the recovery affected the entire futures curve rather than being limited to short-covering in the front month. Nevertheless, Friday’s advance recovered only around one-third of Thursday’s steep decline. Prices therefore remained substantially below their 15 July levels, suggesting that market sentiment was still fragile despite the rebound.

EFP, EFS and Spread Activity

Spread trading remained the dominant component of cocoa futures activity on 17 July. In New York, spread volume reached 21,772 lots, equivalent to approximately 62.8% of total reported volume. December 2026 was the most actively traded spread contract with 8,662 lots, followed by September 2026 with 5,629 lots and March 2027 with 4,348 lots.

New York also recorded 141 EFP transactions, concentrated entirely in the September and December 2026 contracts, with 75 and 66 lots respectively. EFS activity totalled 80 lots, all of which were reported in September 2026.

London reported 19,222 lots of spread volume, representing approximately 62.7% of total volume. December 2026 led spread activity with 6,827 lots, followed by March 2027 with 4,662 lots and September 2026 with 4,585 lots.

EFP activity was substantially higher in London than in New York, reaching 427 lots. September 2026 accounted for 216 lots, March 2027 for 142 lots and December 2026 for 69 lots. London EFS volume totalled 55 lots, comprising 50 lots in December 2026 and five lots in September 2026.

The high proportion of spread trading in both markets indicates that much of Friday’s activity involved repositioning between contract months rather than outright directional exposure. London’s stronger EFP activity may also reflect more active movement between futures and the underlying physical cocoa market.

US–UK Spread

(Sep Contract)

$5,610 − (£4,102 x 1.345$/£) =$93ton (down from $108ton)

Volume and Open Interest

New York Cocoa

London Cocoa

Trading activity moderated on 17 July despite the recovery in cocoa futures prices. New York cocoa volume fell by 21.92% from the previous session to 34,667 lots, while London volume declined by 8.03% to 30,637 lots. Combined turnover across the two markets decreased by 15.96% to 65,304 lots.

The reduction in volume indicates that Friday’s rebound attracted less participation than the sharp sell-off recorded on 16 July. This suggests that the recovery was less forceful than the preceding decline and may have been driven partly by short-covering and tactical repositioning rather than a broad return of aggressive buying interest.

Between 15 and 16 July, New York open interest increased by 1,021 contracts, or 0.50%, while London open interest declined by 1,248 contracts, or 0.54%. The rise in New York open interest during Thursday’s sell-off suggests that new positions were added as prices declined. In London, the simultaneous fall in prices and open interest points to at least some liquidation of existing positions.

Commitments of Traders

New York Cocoa

As of 14 July, non-commercial traders remained net short New York cocoa by 18,516 contracts, compared with a net short position of 20,051 contracts one week earlier. The speculative net short therefore narrowed by 1,535 contracts.

The improvement did not result from fresh speculative buying. Non-commercial longs fell by 4,155 contracts, while shorts declined by a larger 5,690 contracts. This indicates that bearish exposure was reduced primarily through short-covering, while long-side conviction also weakened.

Non-commercial spreading positions increased by 3,988 contracts to 108,895, representing 39.9% of open interest. The high level of spread positioning suggests that a substantial share of speculative activity remained focused on movements between contract months rather than outright price direction.

Commercial traders remained net long by 16,937 contracts, although their net position declined by 1,670 contracts during the week as commercial short positions increased more rapidly than commercial longs.

Total futures-and-options open interest increased by 5,679 contracts to 272,953, despite the reduction in outright non-commercial positions. The increase was largely associated with expanding spread and commercial activity.

London Cocoa

Managed-money positioning in London was almost balanced on 14 July, with 7,207 long contracts and 8,163 short contracts, leaving funds marginally net short by only 956 contracts. This was considerably less bearish than the non-commercial position in New York.

However, London managed money also held 39,601 spreading positions, substantially exceeding its outright long and short exposure. Other reportable traders similarly held 51,935 spreading positions. This indicates that relative-value and calendar-spread strategies represented a large part of reportable participation in the London market.

Producers, merchants, processors and users were net short by 29,839 contracts, consistent with physical-industry participants using futures to hedge cocoa inventories or future sales. Swap dealers held an offsetting net long position of 28,345 contracts.

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.

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

Data

📊 Grindings 📦 Inventory / Certified Stocks 🚢 Import / Export Flows ⚖️ Stock-to-Grind Ratio 📈 Futures Contracts 🔄 Futures Curve & Spreads 🧠 COT / Positioning 🚚 Port Deliveries 🌧️ Weather Dashboard 🌀 Options & Volatility 📅 Seasonality 📑 Institutional Reports 🗓️ Cocoa Calendar This section is currently under active development. We are building a structured, transparent cocoa market data platform covering futures analytics, certified stocks, positioning

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Tomorrow's Outlook

New York September cocoa is likely to open the next session with a slightly positive but still fragile bias after closing at 5,610 USD/tonne.

The market stabilized after Thursday’s sharp sell-off, but Friday’s recovery occurred on lower volume and did not fully restore bullish momentum. The most likely scenario is therefore consolidation between 5,500 and 5,700 USD/tonne.

Holding above 5,530–5,500 would support another move toward 5,650, followed by Friday’s high at 5,767. A break above 5,767 would strengthen the recovery and could open the way toward 5,900–6,000.

A fall below 5,500 would weaken the rebound and increase the probability of another test of 5,393. A break below that level would indicate renewed selling pressure.

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.