Daily Cocoa Market Report (19 Dec 2025): Cocoa Consolidates as Physical Flows Offset Tight Stocks and Policy Risk
Cocoa futures extended their corrective phase on Friday, with both New York and London recording broad-based declines across the curve. The session was characterized by lighter participation and continued position adjustment rather than fresh directional conviction. Price action remained orderly, reinforcing the view that the market is transitioning from forced liquidation into late-December consolidation.
Weather
Weather conditions across the West African cocoa belt remain mixed as the main crop harvest progresses. While light to moderate rains persisted into mid-December across parts of Côte d’Ivoire and Ghana, supporting pod development and bean fill, the seasonal transition toward the Harmattan is now clearly under way. Northeasterly dry winds are beginning to suppress rainfall and lower humidity, particularly in central and northern growing zones, increasing the risk of soil moisture stress in the coming weeks. For now, recent rains have helped crops enter the dry season in relatively good condition, but a strengthening Harmattan into late December and January would raise downside risks to bean size, quality, and late-season pod retention, keeping weather firmly on the market’s watchlist.
Futures Performance
New York Cocoa (ICE US)
| Contract | 18-Dec | 19-Dec | Change (USD) |
|---|---|---|---|
| Mar-26 | 5,928 | 5,850 | −78 |
| May-26 | 5,955 | 5,887 | −68 |
| Jul-26 | 5,970 | 5,909 | −61 |
| Sep-26 | 5,956 | 5,907 | −49 |
New York cocoa accelerated lower on Friday, with losses expanding sharply versus the prior session. The front of the curve led the decline, with March losing nearly 80 points, confirming that selling pressure intensified rather than stabilized. The steeper losses in nearby contracts point to renewed liquidation and risk reduction ahead of the weekend, rather than simple technical drift. While the curve remains backwardated, the magnitude of the move reflects a clear shift toward defensive positioning.
London Cocoa (ICE Europe)
| Contract | 18-Dec | 19-Dec | Change (GBP) |
|---|---|---|---|
| Mar-26 | 4,337 | 4,292 | −45 |
| May-26 | 4,321 | 4,266 | −55 |
| Jul-26 | 4,308 | 4,256 | −52 |
| Sep-26 | 4,288 | 4,235 | −53 |
London cocoa followed New York decisively lower, with broad and heavier declines across the entire curve. Losses were evenly distributed across nearby and deferred months, confirming systemic de-risking rather than curve-specific pressure. The lack of relative strength in London despite tighter certified stocks suggests that macro risk reduction and post-expiry adjustment dominated price action into the close.
Contango vs Backwardation
Despite the late-week sell-off, both New York and London remain firmly backwardated. Nearby contracts continue to trade at a premium to deferred months, confirming that the market is not pricing storage abundance or surplus conditions. The persistence of backwardation reflects ongoing tightness in certified stocks, lingering delivery and compliance risks, and limited incentive to carry inventory forward. Importantly, backwardation has compressed modestly versus earlier December extremes, indicating easing immediate stress but not a structural shift toward contango.
US–UK Spread (March Contracts)
$5,850−(4,292£×1.337$/£)=$112 (down from $125)
Volume & Open Interest
New York Cocoa (ICE US)
| Date | Volume | Open Interest |
|---|---|---|
| Dec 19, 2025 | 17,154 | Not yet reported |
| Dec 18, 2025 | 19,939 | 121,844 |
| Dec 17, 2025 | 21,391 | 121,368 |
| Dec 16, 2025 | 21,696 | 119,328 |
| Dec 15, 2025 | 37,156 | 119,973 |
New York volumes continued to compress into Friday, falling to 17,154 contracts from 19,939 on Thursday and well below the post-expiry spike seen on December 15. This steady decline in turnover confirms that forced liquidation has largely passed. Importantly, open interest rebuilt earlier in the week (up to 121,844 by December 18) before reporting paused on Friday, reinforcing the view that the market has transitioned from liquidation to position re-establishment. The combination of fading volume and stabilized open interest points to consolidation rather than renewed downside pressure.
London Cocoa (ICE Europe)
| Date | Volume | Open Interest |
|---|---|---|
| Dec 19, 2025 | 16,270 | Not yet reported |
| Dec 18, 2025 | 11,986 | 155,023 |
| Dec 17, 2025 | 15,539 | 155,010 |
| Dec 16, 2025 | 20,392 | 153,557 |
| Dec 15, 2025 | 21,520 | 154,451 |
London volumes rebounded modestly on Friday to 16,270 contracts after Thursday’s sharp compression, but remain well below early-December activity. Open interest has been trending higher into mid-week, reaching 155,023 by December 18, indicating that participation remains intact despite lower turnover. This pattern—lower volume alongside firm open interest—suggests selective re-positioning rather than capitulation selling. The data continue to support a consolidation regime, with liquidity thinning but structural engagement intact.
Cross-Market Interpretation
Across both exchanges, the synchronized decline in volume following the December contract expiry confirms that the bulk of forced position adjustment is complete. New York shows clearer signs of stabilization, while London retains higher structural open interest despite weaker day-to-day liquidity. This configuration typically precedes range-bound trading, with sharper price sensitivity to incoming supply, flow, and policy headlines rather than trend-driven momentum.
COT Positioning
The U.S. COT data for the period ending 9 December 2025 corresponds to the impulsive leg of the rally, not the subsequent correction. During this window, cocoa futures advanced sharply from the mid-$5,300s toward the $6,300–6,400 zone, and the COT reflects active long accumulation rather than distribution. The increase in non-commercial long exposure alongside rising open interest confirms that managed money was adding risk into strength, consistent with trend participation and momentum chasing, not defensive positioning.
Crucially, there is no evidence in this COT window of long liquidation or short re-engagement. Commercials increased short exposure in a controlled manner, consistent with hedging into higher prices rather than signaling supply relief. The expansion in total open interest during this period validates that the rally was supported by new positioning, not merely short covering. The subsequent price pullback occurred after this reporting window and therefore cannot be attributed to the Dec 9 COT.
London (ICE Europe, as of 16 December)
London positioning remains structurally bearish but shows clear signs of stabilization. Managed Money is still heavily net short, with shorts (27,489) far exceeding longs (5,229), but the pace of short accumulation has slowed materially. Producer/Merchant hedging remains elevated on the short side, reflecting continued forward selling into deferred strength rather than immediate physical stress. Importantly, total open interest remains high, and the dominance of spread positions suggests ongoing roll activity and risk management rather than fresh directional conviction. This leaves London vulnerable to further short covering, particularly if New York stabilizes or if certified stocks continue to tighten.
Certified Stocks
- US certified stocks: 1,641,641 bags (down from 1,642,801)
- UK certified stocks: 566,563 bags (no change)
US stocks declined again, reinforcing the narrative of ongoing drawdowns and tighter availability in New York-deliverable supply. UK stocks were unchanged on the day, stabilizing after recent sharp declines. The contrast continues to underpin structural differences between the two markets, with New York remaining more sensitive to inventory movements.
Intraday / Short-Term Outlook
US cocoa futures remain structurally weak despite the recent stabilization. On the weekly chart, price is still below declining long-term moving averages, confirming that the broader trend remains bearish, with the 5,800–5,850 zone acting as a critical long-term demand area rather than a confirmed base. The daily chart shows a corrective rebound that has stalled beneath falling short- and medium-term moving averages, with RSI near 50 and flattening MACD signaling indecision and range compression rather than trend reversal. On the 1-hour timeframe, price continues to trade in a weak descending structure, with repeated failures near 5,900–5,950 and momentum remaining negative, while the 5-minute chart reflects choppy, low-conviction price action dominated by short-term flows and market-maker activity. Overall, the market is consolidating within a broad 5,750–6,000 range, where rallies are still being sold and downside risk persists unless cocoa can achieve a sustained daily close above 6,000 with volume, while a clean break below 5,800 would likely trigger renewed downside acceleration.
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.
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