Cocoa Rebounds as Ivory Coast Slows Forward Sales Amid El Niño Concerns (2 June 2026)

• July New York cocoa rose 175 points (+4.5%) to settle at 4,074, while July London cocoa gained 148 points (+5.0%) to close at 3,128.

• Ivory Coast has reportedly sold 950,000-1,000,000 tonnes of cocoa export contracts for the 2026/27 main crop.

• NOAA assigns an 82% probability that El Niño will develop during May-July 2026 and a 96% probability that it will persist through Northern Hemisphere winter.

• Barry Callebaut warned that El Niño could disrupt rainfall patterns and increase temperatures in key cocoa-producing regions.

Following Monday's stabilization, cocoa futures staged a powerful recovery on Tuesday, 2 June, with both New York and London markets posting gains of nearly 5%. The benchmark July 2026 New York cocoa contract closed at 4,074, up 175 points (+4.5%) from the previous session, while July London cocoa settled at 3,128, gaining 148 points (+5.0%). Strength was broad-based across both forward curves, with deferred contracts advancing between 4% and 5%, suggesting renewed buying interest after the sharp correction seen during the second half of May.

Ivory Coast Slows Forward Sales

Attention remained focused on Ivory Coast, where industry sources reported that approximately 950,000 to 1 million tonnes of cocoa export contracts have already been sold for the upcoming 2026/27 main crop. The country's Coffee and Cocoa Council (CCC) has reportedly slowed additional forward sales because of concerns that a developing El Niño weather pattern could affect production prospects later this year.

Reflecting firm commercial demand, the CCC increased export premiums to at least €100 per tonne above ICE futures prices, indicating that buyers remain willing to secure future supplies despite elevated prices. The decision to slow sales highlights growing uncertainty surrounding the next crop and reinforces the market's sensitivity to weather developments.

El Niño Risk Gains Attention

Weather concerns have become increasingly important following a series of forecasts from major climate agencies. According to NOAA, there is an 82% probability that El Niño conditions will develop during the May-July period and a 96% probability that the event will persist through the Northern Hemisphere winter. Forecasts from the World Meteorological Organization (WMO) and the International Research Institute for Climate and Society (IRI) similarly point toward a high likelihood of El Niño developing during the second half of 2026.

Historically, El Niño events have altered rainfall and temperature patterns across several cocoa-producing regions. While each event is different and the relationship is not always straightforward, El Niño conditions have often been associated with periods of hotter and drier weather in parts of West Africa. At this stage, the forecasts do not imply an imminent production shortfall, but they do increase uncertainty regarding the size and quality of the 2026/27 crop.

Barry Callebaut Highlights Weather Concerns

Additional attention was drawn to comments from Barry Callebaut, one of the world's largest cocoa processors. The company stated that a developing El Niño event could increase temperatures and disrupt rainfall patterns in key cocoa-producing regions, potentially reducing production and supporting prices.

However, management also emphasized that they do not expect cocoa prices to experience another dramatic surge similar to that seen over the past two years, noting that prices have already adjusted substantially to existing supply concerns.

Market Remains Sensitive to Supply Risks

The latest developments highlight the delicate balance currently facing the cocoa market. Demand remains under pressure from historically high prices, yet physical market indicators continue to point toward cautious producer selling, firm forward demand and persistent weather-related supply risks.

While Tuesday's rally does not fundamentally alter the broader corrective trend that has unfolded since the record highs reached in 2024, it demonstrates that the market remains highly sensitive to any development that could threaten future production or tighten the global balance sheet.

Futures Performance

New York Cocoa (CC)

New York cocoa staged a sharp recovery on 02-Jun following Friday's selloff and Monday's consolidation. The benchmark July 2026 contract settled at 4,074, gaining 175 points (+4.5%) from the 01-Jun close of 3,899. Strength was broad-based across the curve, with deferred contracts advancing between 173 and 196 points. The largest gain occurred in May 2027, which rose 196 points (+4.7%). Trading activity was concentrated in the nearby July and September contracts, with total market volume reaching 57,618 lots.

London Cocoa (C)

London cocoa also posted a strong rebound, with the benchmark July 2026 contract rising 148 points (+5.0%) to close at 3,128. Gains were recorded across the forward curve, ranging from 135 to 156 points. The strongest performance was seen in the December 2026 contract, which advanced 156 points (+5.2%). Total market volume reached 39,275 lots, with activity concentrated in the July and September positions.

EFP, EFS and Spread Activity

New York Cocoa (CC)

Exchange for Physical (EFP) activity was modest at 105 lots, while no Exchange for Swap (EFS) transactions were reported. The dominant feature of the session was exceptionally heavy calendar-spread trading, with spread volume reaching 40,453 lots, representing approximately 70% of total market volume (57,618 lots).

Spread activity was concentrated in the nearby sections of the curve, particularly the Jul-26/Sep-26 and Sep-26/Dec-26 spreads, reflecting active rolling of positions and continued management of forward exposure. The exceptionally high share of spread volume relative to outright trading suggests that market participants remained focused on repositioning existing exposure rather than initiating large new directional bets. Nevertheless, the strong outright price recovery indicates that short-covering and fresh buying interest accompanied the roll activity.

London Cocoa (C)

London cocoa recorded very strong Exchange for Physical (EFP) activity, totaling 1,917 lots, while no EFS transactions were reported. Calendar-spread volume reached 25,914 lots, accounting for approximately 66% of total market volume (39,275 lots).

The elevated level of spread trading points to continued contract rolling and curve management by commercial and speculative participants. Unlike New York, London also experienced substantial EFP activity, suggesting active physical-market hedging and producer or merchant participation alongside futures trading. The combination of strong EFP volume and robust outright price gains indicates that the rally was supported by both futures-market repositioning and underlying physical-market engagement.

US–UK July Spread

$4,074 − (£3,128 x 1.345$/£) =$-133ton (down from $-112)

Volume and Open Interest

New York Cocoa (CC)

Trading activity accelerated on 02-Jun as total volume increased to 57,618 lots, up from 53,788 lots on 01-Jun and marking the highest daily volume since 27-May. The increase in turnover coincided with the sharp rebound in prices, indicating strong market participation during the recovery.

Open interest stood at 205,687 contracts at the close of 01-Jun. The combination of rising open interest and strong volume into the recent selloff suggests that new positions had been established during the decline. The sharp rally on 02-Jun may therefore reflect a mix of short covering and fresh buying interest.

London Cocoa (C)

London cocoa volume rose sharply to 39,275 lots on 02-Jun from 24,143 lots on 01-Jun, representing a substantial increase in trading activity and the highest volume recorded since 29-May. The surge in turnover accompanied the market's nearly 5% advance, highlighting broad participation in the recovery.

Open interest reached 223,119 contracts at the close of 01-Jun, continuing the steady upward trend seen throughout the previous week. The persistent rise in open interest during the recent period suggests that market participants have continued to build exposure despite heightened price volatility.

The increase in both volume and open interest over recent sessions points to sustained engagement from both commercial and speculative participants. London's recovery on 02-Jun occurred alongside significantly stronger turnover, indicating that buying interest extended beyond simple short-covering activity.

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 Wednesday

The market has stabilized after an extremely aggressive selloff, but Tuesday's rally appears driven primarily by short-covering and position adjustment rather than a major shift in fundamentals. Technical conditions have improved, yet the longer-term trend remains fragile while prices remain below the major moving averages.

For Wednesday, the most likely outcome is consolidation with a mildly positive bias. Holding above 4,000 would reinforce the recovery narrative, while a break above 4,200 would signal that a larger corrective rally toward 4,400-4,500 may be developing. Conversely, failure to defend 4,000 would suggest that sellers remain in control of the broader trend.

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.