Daily Cocoa Market Report (2 Jan 2026): Mixed Signals After Holiday Liquidity, Weather and Supply Narratives in Focus

ICE cocoa futures sold off in the first post-holiday session, with front tenors leading weakness in both venues. In New York, Mar-26 closed at 5,891, down 152 (-2.52%) from 31-Dec, marking broad losses in May (-2.61%), July (-2.45%) and a smaller drop in September (-0.57%). In London, Mar-26 closed at 4,269, down 90 (-2.07%), with similar softness across May (-2.21%), July (-2.00%) and September (-2.07%).

CRA and satellite intelligence point to stable agronomic conditions in West Africa. CRA reports a mild Harmattan event and higher-than-normal humidity through December in both Côte d’Ivoire and Ghana, with expectations that this moisture profile continues into January. CRA also flags improving prospects for Ghana’s mid-crop, reinforcing a production recovery narrative. Analyst commentary from Tropical General Investments Group adds confidence to this view, noting that farmers in Côte d’Ivoire are reporting larger and healthier pods compared with the same period last season, a signal that supports expectations for a stronger February–March harvest window. The same analyst projects that Ghanaian cocoa output in 2025-26 should rise year-on-year, attributing the recovery to improved farm conditions and better crop management practices.

Ecuador presents the main offsetting supply risk. CRA reports poor rainfall conditions and states that local crop surveyors are observing a slowdown in harvested volumes, particularly through the first months of 2026. This introduces downside risk to Ecuador’s ability to contribute meaningfully to near-term global supply normalization if the trend persists.

Weather forecasters and satellite providers show broad agreement on short-term rainfall behavior. Maxar reports isolated to scattered showers across West Africa over the past two days, with similar isolated rainfall expected today before a transition into a drier pattern through early next week. A separate forecast from late December indicates that scattered showers were recorded in southeastern Côte d’Ivoire and southern Ghana on December 31, with expectations for comparable conditions in the sessions ahead. The consensus view is that harvesting activity should see minimal disruption overall, though temporary increases in topsoil moisture could cause brief, localized delays without creating regional bottlenecks.

Market structure reflects this mixed but constructive supply backdrop. The ICE March cocoa contract has remained in consolidation, but support has emerged from a slowdown in Côte d’Ivoire arrivals. Sentiment has been buoyed by expectations that cocoa will be reintroduced into the Bloomberg Commodity Index, a development that has strengthened the speculative bid due to anticipated fund inflows and renewed institutional demand. It now remains to be seen how the buying activity from index funds, beginning 8 January, is already priced into the market and how supportive this demand will actually prove.

The short-week calendar shifts attention to positioning risk. The Commitments of Traders report will be released Monday.

Ecuador Weather Forecast

Ecuador’s cocoa production is concentrated primarily in a north–south corridor along the western coastal lowlands and lower Andean foothills, spanning the provinces of Esmeraldas, Manabí, Guayas, Los Ríos, and El Oro, where wet-season rainfall over the next 14 days is expected to accumulate in the moderate to heavy range of approximately 50–200 mm, supporting high humidity and favorable soil moisture. In addition to the coastal belt, Ecuador also has a distinct cocoa-growing cluster in the northern interior Andean foothills, centered around Santo Domingo de los Tsáchilas and producing districts west of Ibarra, including La Bonita, Luz de Vida, Primavera, and nearby sub-Andean valleys, a zone that may receive locally elevated cumulative rainfall toward 120–220 mm, but still below the extreme 500–600 mm+ rainfall plume observed farther north in high Colombian Andean terrain. The ~526–600 mm+ accumulation signal is therefore real but positioned upslope and north of Ecuador’s core cocoa farmland, driven by orographic mountain convection rather than direct cocoa-belt precipitation. Agronomically, the outlook implies sustained humidity beneficial for tree vigor and bean filling, but also heightened fungal disease pressure risk during multi-day rain intervals, particularly in northern foothill farms, while the main cocoa regions themselves avoid the flood-level extremes seen outside the production zones.

Futures Performance

New York Cocoa (ICE US)

London Cocoa (ICE Europe)

Contango / Backwardation Structure

Both ICE US and ICE Europe cocoa futures remained firmly in contango, with deferred tenors priced above the front of the curve, confirming that prompt-supply stress has not produced any curve inversion consistent with backwardation; while London’s earlier GMT settlement window amplified front-segment softness at the 2026 reopen, the term structure in neither venue developed a sustained downward gradient or hierarchy where nearby contracts settled above deferred months, indicating that recent price action reflects year-end liquidity conditions and position flow rather than an acute inversion in physical supply dynamics.

US–UK Spread (Mar-26)

5,891 − (4,269 × 1.350) = +145 USD (down from $171)

The spread softened relative to prior sessions, reflecting U.S. front-end unwinding more than a structural valuation shift. Spreads remain elevated relative to historical norms but show sensitivity to venue-specific flows.

Volume & Open Interest

New York Cocoa (ICE US)

London Cocoa (ICE Europe)

On Tuesday, 2 January 2026, cocoa futures markets sold off on a tactical unwind in the first post-holiday session, with price declining from 31 December settlements under thin liquidity, and while no official exchange open-interest snapshot is available for that Tuesday, the subsequent data confirms the price reaction was driven by position flow and liquidity impairment rather than structural short dominance. The market carried elevated risk into Friday’s 31 December handoff, leaving both venues in contango, and the sequence of a liquidity-amplified pullback followed by technical compression signals a fragile positioning reset, where directional conviction will only be validated once meaningful volume and open-interest telemetry confirm the next flow regime as 2026 participation normalizes.

Certified Stocks

Certified stocks in the U.S. climbed modestly week‐on‐week, while U.K. stocks remained flat. The inventory backdrop continues to support contango structure and signals adequate exchange warehouse availability.

What to Expect Tomorrow

Price remains in a broad downtrend since mid-2025, and although the most recent swing defended a double-bottom zone near 5,820–5,840, the subsequent bounce is weak, compressed, and occurring on lower relative volume compared to the sell legs, indicating short-covering into liquidity rather than genuine accumulation. The current print around 5,891 sits below the 200-period moving average and below the 90/150 MA cluster, confirming that trend control is still with sellers. RSI near 44–45 is neutral-bearish and not oversold, while MACD signal lines are tangled with a flat, slightly negative histogram, showing momentum exhaustion without a confirmed bullish flip. OBV continues to trend lower and remains below prior peaks, reinforcing that buyers have not regained control. Immediate resistance spans 5,900–5,915, followed by structural caps at 6,000 and the MA confluence zone near 6,080; support remains anchored at 5,820–5,840, with 5,750 as the next downside pocket if that floor breaks. The most probable path is a retest of support and potential continuation lower unless price can close above 5,915, hold above 5,900 on retest, and expand through 6,000 on volume stronger than recent distribution candles; absent that, any push into 5,900 should be treated as sell liquidity, with the bounce viewed as a likely bull trap used for larger hands to distribute into retail optimism.

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.