Daily Cocoa Market Report (16 Dec 2025): Massive drawdown in European cocoa inventories.

• New York and London cocoa rebounded on Tuesday, led by renewed strength in deferred contracts following Monday’s sharp liquidation.
• Physical and policy developments in Côte d’Ivoire continue to dominate sentiment, with CCC intervention and weather dynamics creating conflicting short-term signals.
• CRA expects cocoa output from Côte d’Ivoire and Ghana to decline further
• Massive drawdown from Europe cocoa inventories
• Citigroup cut its 2025/26 global cocoa surplus estimate to 79,000 MT from a September estimate of 134,000 MT.

Analysts continue to flag a structurally tightening supply outlook in West Africa despite near-term delivery flows. CRA expects cocoa output from Côte d’Ivoire and Ghana to decline further over time due to entrenched structural issues, while Ecuador — and potentially Brazil — are seen as the primary sources of incremental global supply growth. Weather remains the dominant risk variable, with TRS warning that Côte d’Ivoire’s 2025/26 crop forecast could be revised lower if a weak mid-summer harvest materialises.

The expiry of the December contract underscored shifting origins in deliverable supply: total deliveries reached 40,730 tons, of which 24,070 tons, or 59.1%, were of Ecuadorian origin. This reinforces perceptions that Ecuador will play an outsized role in balancing the market in coming seasons, with CRA forecasting Ecuador’s 2025/26 harvest at 650,000 tons and 2026/27 at 700,000 tons, while TRS estimates 575,000 tons for 2025/26. As long as Ecuadorian output continues to expand, steady bean flows into exchange warehouses are expected, particularly with New York still paying a +$80 premium and London around +£50. Separately, cocoa equities also reacted to sector developments, with Barry Callebaut shares rising after Reuters reported the company is considering separating its cocoa division from the broader group.

Weather Conditions

Weather conditions across West Africa are shifting into a more seasonal and risk-sensitive phase. Recent rainfall that supported soil moisture and pod development earlier in December is now tapering off across most cocoa-growing regions in Côte d’Ivoire and Ghana, consistent with the transition deeper into the dry season. At the same time, Harmattan conditions are beginning to emerge, with dry northeasterly winds gradually moving southward. While the Harmattan has not yet reached peak intensity, its early onset raises concern for the weeks ahead, as sustained dry air and dust can reduce humidity, stress trees, slow bean filling, and increase the risk of smaller bean sizes and quality deterioration. The fading of regular rains means cocoa trees will become increasingly dependent on residual soil moisture, making late-December and January weather developments critical. Overall, weather risk is rising again, shifting from rain adequacy to Harmattan-related stress, which keeps near-term supply vulnerability elevated despite recent optimism around crop size.

Weather Analysis Week 50 and 51

Past Week 50 Weather (December 7-13, 2025) The RFE2 satellite data for December 7-13, 2025 shows moderate rainfall distribution across West Africa’s primary cocoa zones: Côte d’Ivoire: Cocoa-growing regions received 15-30mm of rainfall, with better coverage in the southern and western cocoa belt areas around Man, Soubré, and Daloa. Ghana:

CocoaIntelCocoa Intel

Futures Performance

New York Cocoa (ICE US)

New York stabilized after Monday’s aggressive long liquidation. Gains were evenly distributed across the curve, indicating re-risking rather than short covering, with deferred months outperforming the front structure.

London Cocoa (ICE Europe)

London posted a stronger rebound than New York, supported by physical tightness concerns and regulatory risk. The uniform advance across deferred months reflects structural support rather than speculative chasing.

Contango vs Backwardation

Using the latest data across both exchanges, the cocoa forward curve remains firmly in backwardation in New York and London, with nearby contracts consistently trading at a premium to deferred months. In New York, the March–May–July structure shows only shallow contango relief despite the recent pullback, indicating that the market continues to assign greater value to prompt availability than to forward supply. London displays a similar pattern, with nearby strength persisting even as volumes moderate, reflecting ongoing physical tightness rather than speculative distortion. This curve configuration contrasts sharply with a contango environment, where deferred prices would exceed nearby levels to compensate for storage and financing costs. Instead, the absence of contango confirms that the market is not pricing surplus or storage abundance, but rather continued near-term scarcity driven by limited certified stocks, delivery risk around contract expiries, and compliance constraints under EU regulations. Importantly, the persistence of backwardation despite recent price corrections suggests that the adjustment has been technical in nature, not a fundamental loosening of supply conditions, leaving the curve vulnerable to renewed tightening should physical flows or certified stocks deteriorate further.

US–UK Spread March 2026

$5,998−(4,356£×1.342$/£)=$152 (down from $206)

This $54 contraction reflects relative strength in London versus New York, with UK prices rebounding more aggressively while US futures lagged. The compression suggests easing transatlantic dislocation after last week’s extreme divergence, driven less by fresh selling in New York and more by catch-up buying and physical support in London.

Volume and Open Interest

New York Cocoa (ICE US)

New York volumes cooled on Tuesday following Monday’s decline, reflecting a normalization of activity after the December contract expiry. Open interest has declined steadily from last week’s peak, confirming that the recent correction has been driven by position reduction rather than fresh short selling. The combination of lower open interest and still-respectable turnover suggests consolidation after liquidation, not a loss of market participation.

London Cocoa (ICE Europe)

London volumes continued to ease into mid-week, while open interest has fallen sharply from early-December highs. This confirms sustained trimming of exposure following the recent rally and reflects reduced speculative appetite amid increased physical and policy-driven uncertainty. Despite the decline, participation levels remain consistent with an active market rather than a disorderly exit.

Certified Stocks (ICE)

• US Stocks: 1,651,199 (↓ from 1,659,110 prior day)
• UK Stocks: 561,563 (↓ from 773,281 prior day)

The sharp decline in UK certified cocoa stocks reflects a combination of strategic inventory reallocation and market stress, rather than a sudden collapse in demand. With EU traceability and deforestation rules tightening, fully compliant cocoa has gained value in the physical market, encouraging holders to withdraw ICE Europe stocks and sell them through bilateral channels where premiums, payment terms, or currency exposure are more attractive. At the same time, persistent New York premiums versus London have opened geographic arbitrage opportunities, while cash-flow pressures among exporters, underscored by the CCC’s intervention to prevent defaults, have increased the incentive to monetize inventory quickly. The timing around contract expiry further supports this view, as stock withdrawals typically accelerate once delivery risk passes. Overall, the UK stock drawdown points to value optimization and liquidity management, not surplus liquidation, reinforcing that compliant cocoa remains structurally tight.

What to Expect Tomorrow

US cocoa is currently in a post-bubble digestion phase rather than a continuation of its prior bull trend. On the weekly chart, the secular uptrend from 2023 has clearly broken, with price trading below a declining 20-week moving average, RSI near 41 indicating weak but not oversold conditions, and a flat, deeply negative MACD suggesting downside momentum has stalled but not reversed; OBV remains structurally damaged, confirming that long-term capital has not returned. The 4-hour chart reinforces this view, showing a well-defined descending channel, repeated failures below the falling 200-MA, and momentum indicators sitting in neutral territory, consistent with a bear-market consolidation rather than a base. On the 1-hour timeframe, price is coiling in a tight 5,980–6,020 range with lower highs intact, weak RSI readings, and rolling stochastic and MACD signals, implying a slight bearish bias unless resistance is reclaimed. The 5-minute chart offers no directional edge beyond short-term scalping, as price action is choppy and mean-reverting with low-conviction momentum. Overall, the technical structure favors continued range-to-down behavior between roughly 5,900 and 6,100, with upside remaining corrective unless price can reclaim and hold above key moving-average resistance on higher timeframes.

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.