Daily Cocoa Market Report (14 Jan 2026): Prices Slide as Markets Brace for Key Grindings Data

The March contract in New York extended its decline on Wednesday, settling down 135 points (-2.59%) at 5,078. The market broke decisively through recent technical support, printing a session low of 4,961, confirming that selling pressure remains dominant despite early signs of short-term exhaustion. While prices have corrected sharply, volatility remains elevated as the market continues to reprice demand expectations.

Trading activity stayed high, with 58,102 contracts traded, though volumes have now begun to ease from last Friday’s peak, suggesting that the most aggressive phase of liquidation may be moderating. Notably, Wednesday’s decline coincided with a 2,840-contract increase in open interest, indicating that new short positions entered the market, rather than the move being driven purely by long liquidation. Technically, prices continue to trade below the lower Bollinger Band, while daily momentum indicators remain oversold, increasing the risk of consolidation but not yet signaling a durable reversal.

Market focus has now shifted decisively to grindings. European Q4 grindings, released, fell 8.3% year-on-year, a significantly weaker outcome than market expectations.

Europe and Germany Cocoa Grindings Decline in Q4 2025

Germany and Europe both reported sharp declines in cocoa grindings in the fourth quarter of 2025, reinforcing evidence of demand destruction driven by historically high cocoa prices. Europe: Q4 Grinding Figures The European Cocoa Association (ECA) reported that Europe’s Q4 2025 cocoa grind fell 8.3% year-on-year to 304,

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Prior to the release, forecasts for European grindings were comparatively mild, with CRA at -0.3%, TRS at -2%, and a Bloomberg survey around -3%. The magnitude of the miss represents a clear negative demand surprise and validates the recent intensity of selling pressure. Expectations for North American grindings remain mixed, with CRA projecting a 5.8% year-on-year decline, while TRS anticipates a modest 3% increase.

The full-year data confirms that demand weakness is structural rather than isolated. Full-year European grindings for 2025 totaled 1,327,107 tonnes, down roughly 6% year-on-year from 1,413,494 tonnes in 2024, marking the lowest annual total in over a decade.

Source: Reuters, ECA, TRS, CRA, Bloomberg.

Futures Performance

US – ICE Cocoa Futures (CC)

UK – ICE London Cocoa Futures (C)

Contango / Backwardation

The cocoa futures curve on Wednesday remained firmly backwardated across both ICE US and ICE London contracts, with front-month prices trading at a clear premium to deferred maturities. In New York, the Mar-26 contract closed at 5,078, declining progressively through May-26 (5,155), Jul-26 (5,240), Sep-26 (5,296) and Dec-26 (5,292), confirming a persistent near-term supply tightness despite the ongoing price correction. A similar structure was evident in London, where Mar-26 settled at 3,733, followed by higher closes in May-26 (3,750), Jul-26 (3,773), Sep-26 (3,791) and Dec-26 (3,787). Although prices fell sharply across the curve, the absence of a shift into contango indicates that the sell-off remains position-driven rather than a reassessment of medium-term supply fundamentals. The continued backwardation suggests that physical tightness, certified stock constraints, and nearby delivery risk remain dominant, even as speculative length is reduced.

US–UK Spread

5,078 − (3,733 x 1.344$/£) = 61USD (up from 35USD)

Volume and Open Interest

US – ICE Cocoa Futures (CC)

UK – ICE London Cocoa Futures (C)

Trading activity surged sharply during the first half of January in both markets, with US volumes peaking on 9 January at 82,465 contracts, coinciding with a notable acceleration in price declines. This pattern strongly indicates long liquidation rather than fresh short-building, particularly as open interest in New York continued to rise into 13 January, reaching 138,452 contracts, even as prices fell. The combination of high volume and rising open interest through mid-month suggests that new positions were still being established during the sell-off, consistent with spread rebalancing and rollover activity rather than a disorderly exit.

In London, volumes followed a similar trajectory, though at lower absolute levels, with a January 9 spike to 45,333 contracts and a secondary peak on January 12. Open interest climbed steadily into early January, topping 164,902 contracts, before easing slightly, indicating partial position trimming rather than structural de-risking. Importantly, volume on 14 January remained elevated in both markets, even as prices fell again, reinforcing the view that the correction is being absorbed with liquidity, not driven by panic selling.

Overall, the volume–open interest relationship supports the conclusion that the recent price decline reflects controlled liquidation and curve realignment, not a collapse in market conviction. The absence of a sharp open-interest contraction argues against capitulation and aligns with the continued backwardation observed along the futures curve.

Certified Inventory Stocks

What to Expect Tomorrow

European Q4 cocoa grindings, released after Wednesday’s close, confirmed a sharp 8.3% year-on-year decline, providing the market with a fresh bearish demand signal heading into Thursday’s session. While recent price action already reflected growing concern about demand destruction, the timing of the release means that today’s liquidation did not fully incorporate this data, leaving scope for additional reaction risk.

As a result, early Thursday trade is likely to open with renewed downside pressure, particularly in London-linked contracts, where demand sensitivity is highest. The data strengthens the fundamental justification for recent selling and reduces the likelihood of an immediate, sustained rebound unless countered by short-covering or spread support.

That said, the market is not entering this session in a vacuum. Technical conditions are already stretched, with short-term momentum indicators showing signs of stabilisation, and certified stocks remain tight, preserving structural backwardation. These factors suggest that any initial reaction to the grindings data may evolve into two-way trade rather than a one-directional sell-off, especially if selling interest fades after the opening.

Crucially, the focus now shifts to whether weak European grindings are an isolated regional issue or a precursor to broader global demand weakness. Absent confirmation from US grindings, the market may begin to differentiate between headline bearish demand and persistent supply constraints, limiting the depth of follow-through.

If you notice any discrepancies in these figures or have extra information, please email hello@cocoaintel.com or leave a comment – corrections and additional insights are always welcome.