Cocoa Recovery Extends as Market Focus Shifts Toward 2026/27 Supply Risks (18/19 May 2026)

News flow was relatively light during the second half of the week, leaving market participants focused primarily on evolving supply and weather expectations. While favorable rainfall across West Africa continued to support crop development and reinforce expectations for an improved mid-crop, cocoa futures nevertheless extended their recovery as buyers returned following the sharp selloff seen in recent weeks.

The principal theme driving sentiment was the growing discussion surrounding the potential emergence of El Niño conditions later in 2026. Although current growing conditions remain generally supportive across Côte d'Ivoire and Ghana, traders increasingly focused on the possibility that weather risks could re-emerge during the development of the 2026/27 crop. As a result, attention gradually shifted away from near-term arrivals and toward longer-term production prospects.

Market activity also suggested that participants were rebuilding risk premium into the forward curve. Strong performance in deferred contracts, rising London open interest, and active spread trading indicated that traders were becoming more willing to price future supply uncertainty despite the absence of immediate production threats..

Weather Outlook (Next 7–10 Days)

Weather conditions across West Africa are expected to remain generally favorable for cocoa development during the coming week. Forecast models indicate widespread rainfall across the main cocoa-growing regions of Côte d'Ivoire, Ghana, Nigeria and Cameroon, with accumulated precipitation ranging from approximately 40–80 mm across most producing areas. Parts of western Côte d'Ivoire, Liberia and Sierra Leone are projected to receive locally heavier totals exceeding 100 mm.

The heaviest rainfall is expected to remain concentrated along the Gulf of Guinea coastal belt, including southern Côte d'Ivoire and Ghana, where soil moisture levels are already adequate following recent precipitation. Central cocoa-growing regions around Daloa, Yamoussoukro, Soubré, San Pedro, Kumasi and Sunyani are forecast to receive regular showers, supporting pod filling and reducing moisture stress.

Temperatures are expected to remain seasonally moderate, generally ranging between 22°C and 28°C across the primary cocoa belt. No significant heat events are currently projected, limiting the risk of moisture loss through excessive evaporation.

While localized flooding cannot be ruled out in isolated coastal areas receiving the highest rainfall totals, current forecasts do not indicate widespread weather-related threats to cocoa production. Overall, the forecast remains supportive for crop development and is likely to maintain favorable growing conditions across the majority of West Africa's cocoa-producing regions.

Futures Performance

Cocoa futures extended their recovery on 18 June, with both New York and London markets closing higher across the curve. While official settlement prices suggested a relatively quiet session in New York, closing prices revealed stronger buying interest into the end of the trading day. London futures outperformed once again, posting gains of approximately 1% across nearby and deferred maturities.

New York Cocoa (CC)

New York cocoa futures closed modestly higher, with gains concentrated in nearby contracts. July 2026 advanced 15 USD/tonne to 4,159 USD/tonne, while September and December 2026 gained 17 and 19 USD/tonne respectively. The stronger performance of the front portion of the curve suggests that buyers continued to rebuild positions following the sharp correction witnessed during the previous month. Deferred contracts also finished in positive territory, although gains were more limited, indicating a relatively stable forward structure.

London Cocoa (C)

London cocoa futures continued to outperform New York, with all major contracts gaining around 1%. July 2026 rose 31 GBP/tonne to £3,187/tonne, while September and December 2026 added 33 and 32 GBP/tonne respectively. The strongest advance was observed in May 2027, which gained 39 GBP/tonne (+1.18%). The broad-based strength across the curve suggests that market participants remain willing to price in medium-term supply uncertainty despite improving weather conditions in parts of West Africa.

London cocoa futures rallied sharply on Friday, extending the recovery that began earlier in the week. With U.S. markets closed for the Juneteenth holiday, London became the sole major cocoa futures market trading and experienced strong buying interest across the entire forward curve.

The rally was accompanied by healthy trading activity, with total volume reaching 17,682 contracts despite the U.S. holiday. The strength was particularly notable because gains were distributed evenly across the curve rather than being concentrated in nearby maturities. This suggests that market participants were repricing medium-term cocoa fundamentals rather than simply reacting to short-term supply developments.

EFP, EFS and Spread Activity

New York Cocoa (CC) (18 June)

Commercial activity remained active across the New York cocoa market. EFP volume totaled 666 contracts, led by July 2026 (291 contracts), September 2026 (236 contracts), and December 2026 (79 contracts), indicating continued participation from physical market hedgers.

EFS activity reached 369 contracts, concentrated primarily in July 2026 (294 contracts) and September 2026 (75 contracts). The presence of both EFP and EFS activity suggests ongoing risk transfer between exchange-traded and over-the-counter cocoa markets.

Spread volume totaled 27,684 contracts, representing approximately 64% of total futures volume. The largest spread activity occurred in September 2026 (9,618 contracts), December 2026 (7,212 contracts), and July 2026 (4,643 contracts). The elevated spread participation highlights continued focus on curve positioning and relative value opportunities across maturities rather than outright directional exposure alone.

London Cocoa (C) (19 June)

Commercial participation remained robust despite the U.S. market holiday. EFP volume totaled 456 contracts, largely concentrated in September 2026 (330 contracts) and March 2027 (118 contracts), reflecting ongoing physical market hedging activity.

EFS volume reached 1,600 contracts, led by July 2027 (1,000 contracts) and September 2026 (400 contracts). The concentration in deferred maturities suggests active management of longer-dated cocoa exposure.

Spread volume totaled 9,093 contracts, with the highest activity recorded in September 2026 (3,195 contracts), December 2026 (2,368 contracts), and March 2027 (1,395 contracts). Strong calendar spread participation indicates continued interest in forward curve structure as the market reassesses medium-term supply expectations.

US–UK July Spread

$4,159 − (£3,187 x 1.330$/£) =$-79ton (down from $-72ton)

Volume and Open Interest

Trading activity remained moderate during the latter part of the week, with volume declining from 59,478 contracts on 16 June to 43,130 contracts on 18 June. Open interest continued to contract, falling by 3,489 contracts over the three-day period to 189,529 contracts. The combination of lower volume and declining open interest suggests that part of the recent recovery was driven by short-covering and position reduction rather than aggressive new long positioning. Despite the decline, open interest remains elevated by historical standards, indicating continued market engagement.

London activity showed a different pattern. Volume recovered from 21,546 contracts on 17 June to 28,707 contracts on 18 June before easing to 17,682 contracts during Friday's holiday-thinned session. More importantly, open interest increased to a record period high of 235,191 contracts on 18 June, up 2,053 contracts from the previous session. Rising prices accompanied by rising open interest is generally considered supportive from a market structure perspective, suggesting that new positions were being established as the market moved higher.

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 Monday (Sep Contract)

Looking ahead to Monday's reopening, New York cocoa futures are expected to begin the session on a firmer footing as traders incorporate the substantial gains recorded in London during Friday's holiday-thinned trading session. With ICE US closed for Juneteenth while London cocoa advanced more than 3% across the curve, a positive adjustment in New York prices appears likely as the two markets realign. Technical indicators have also improved following the recent recovery, with prices holding above key short-term moving averages and momentum indicators continuing to stabilize. Market participants will closely monitor whether fresh buying emerges following the opening gap or whether the move is primarily a catch-up reaction to London's strength. A sustained hold above recent resistance levels would reinforce the view that the market is continuing its recovery from the lows recorded earlier this month.

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.