Daily Cocoa Market Report (20 Feb 2026): Cocoa Rebounds on Strong Volume and Active Positioning

The rebound on 20 February was supported by meaningful participation rather than thin corrective trade. Total volume reached 60,112 lots in New York and 61,745 lots in London, confirming that the bounce attracted real flow. However, more than half of that activity consisted of calendar spread volume (35,110 lots in NY and 37,279 lots in London), indicating that a significant portion of the session’s turnover was structural repositioning rather than outright directional buying. This suggests active curve reshuffling and short-covering across maturities rather than fresh long conviction. EFP activity remained moderate (2,152 in NY; 374 in London), implying no visible physical delivery stress, while elevated London EFS volume (3,167) points to swap-related or institutional flow participation. With block trades absent, the session profile reflects systematic repositioning within a contango structure, not evidence of immediate physical tightness or aggressive new risk accumulation.

Ghana’s cocoa sector is facing an acute liquidity crisis that is now spilling into broader social and political tension, as unpaid obligations within the value chain continue to mount. Minority spokesperson Kojo Oppong Nkrumah has warned that the cocoa value chain is at risk of collapse due to unresolved debts owed by COCOBOD to Licensed Buying Companies. According to his February 22 statements, LBCs have reportedly purchased approximately GH¢10 billion worth of cocoa beans from farmers since November 2025 but have not yet received payment from COCOBOD. As a result, LBCs are unable to evacuate cocoa already purchased or return to farmgate markets to buy additional beans, effectively freezing transactions within the domestic supply chain and creating a severe liquidity bottleneck that extends from exporters to cooperatives and down to smallholder farmers.

At the same time, farmers in major cocoa producing regions have staged protests against COCOBOD and government policy, voicing strong dissatisfaction with the reduction in the guaranteed farmgate price from GH¢3,625 to GH¢2,587 per bag. Growers argue that falling producer prices, rising input costs, and delayed payments for delivered cocoa are pushing households into financial distress. Many farmers report that intermediaries lack the liquidity to purchase new output, increasing the risk of informal cross border sales and smuggling. Critics contend that recent government efforts to clear portions of arrears through Licensed Buying Companies are insufficient relative to outstanding obligations and do not address the immediate liquidity crunch.

This domestic instability coincides with Ivory Coast’s reported review of its own farmgate pricing structure amid declining international futures prices and accumulating unsold beans in warehouses. Together, these developments highlight a widening disconnect between origin pricing mechanisms and global market conditions, adding policy risk and physical market uncertainty to an already volatile futures environment.

Futures Performance

ICE US Cocoa (CC)

The recovery was curve-wide and orderly in structure. Importantly, percentage gains were relatively uniform (≈3%), suggesting systematic short-covering rather than isolated front-end tightness. However, the magnitude of the bounce retraced only a fraction of the prior day’s 7–8% collapse, confirming that the broader technical structure remains damaged. The market is stabilizing, not reversing.

Volume data reinforces this interpretation: activity remained concentrated in May-26 (24,300 lots), indicating that liquidity remains centered in the first deferred contract rather than purely in the front month. This is typical behavior during post-liquidation stabilization phases.

ICE London Cocoa (C)

London’s rebound was proportionally stronger than New York on a close-to-close basis. The front month led the recovery, and percentage gains gradually tapered in the deferred structure. This mild front-led pattern suggests that the prior liquidation pressure may have been slightly overextended in nearby contracts.

Despite the strength of the bounce, London — like New York — remains well below the 18-Feb levels. Structurally, this is corrective price action within a broader volatility regime, not yet a confirmed trend resumption.

Contango vs Backwardation

New York (CC):
Mar-26 closed at 3,072, while Dec-26 closed at 3,352 — a +280 point carry from front to year-end. The structure is upward sloping in a steady gradient (Mar < May < Jul < Sep < Dec). This indicates no visible nearby supply squeeze. The market continues to price tighter balance further forward, or alternatively, embeds carry costs and risk premium into deferred contracts.

London (C):
Mar-26 closed at 2,265 versus Dec-26 at 2,366, a +101 point spread. The curve is also in contango but flatter than New York in absolute terms. The slope moderates progressively into the deferred months, suggesting a more compressed forward risk premium compared to ICE US.

US–UK May Spread

$3,184 − (2,265 x 1.348$/£) =$130 ton (down from $198/ton)

Volume and Open Interest

ICE US Cocoa (CC)

New York volume peaked on February 19 (71,477 lots) during the liquidation phase and remained elevated on February 20 (60,112 lots). This confirms that the rebound session was not a low-liquidity technical bounce; participation remained structurally strong.

The more important signal is Open Interest (OI).
OI rose sharply from 159,616 (Feb 18) to 162,964 (Feb 19) despite the heavy selloff. That combination — falling price with rising OI — is textbook evidence of new short positioning entering the market, not merely long liquidation.

ICE London Cocoa (C)

Volume on February 19 was 51,602 lots, followed by 61,745 lots on February 20, meaning participation actually increased during the rebound.

Unlike New York, London OI has been rising consistently even before the selloff. The increase on February 19 alongside falling prices again suggests new short build rather than long liquidation. The steady OI expansion over multiple sessions indicates systematic positioning — likely fund-driven or swap-related exposure.

COT Analysis

The latest Commitments of Traders data (as of 17 February 2026) confirms that cocoa has transitioned into a fund-driven bearish positioning phase. In ICE US cocoa, total open interest fell sharply by 24,302 contracts week-on-week to 215,270, indicating significant liquidation and repositioning. Non-commercial traders (funds) are now decisively net short, holding 27,619 long contracts versus 43,525 shorts, for a net short position of –15,906 contracts. This marks a clear shift from prior bullish exposure and signals active downside conviction rather than passive long reduction alone. At the same time, commercials are net long (92,484 longs versus 77,105 shorts, net +15,379), meaning trade participants are absorbing speculative selling. This configuration, funds short and commercials long, often emerges during late-stage downside extensions but does not by itself signal a bottom; it instead reflects a market in redistribution.

In London cocoa, the bearish tilt is even more pronounced within managed money. Funds hold just 5,850 long contracts against 32,683 shorts, creating a substantial net short position of –26,833 contracts. That imbalance suggests aggressive speculative pressure on the short side. Producers and merchants are slightly net short (–4,374), consistent with routine origin hedging rather than directional conviction, while swap dealers are materially net long (+34,069), likely reflecting structured or index-related exposure. The broader implication across both exchanges is that cocoa now carries a meaningful short base. This supports continued downside potential if momentum persists, but it simultaneously increases the probability of sharp, disorderly short-covering rallies should price stabilize or a fundamental catalyst emerge. The market is no longer long-dominated; it is structurally two-sided with elevated squeeze risk embedded in positioning.

Cocoa ICE Stocks

US ICE certified stocks continued their aggressive expansion on 20 February, rising from 473,938 to 485,694 bags, while total US ICE stocks increased to 2,111,554. The pace of certification since early February is structurally significant, reflecting a sustained inflow of deliverable supply rather than isolated warehouse adjustments. At the same time, pending grading climbed to 1,958 lots, indicating that additional cocoa is likely to enter the certified category in coming sessions. This expanding deliverable base reinforces the existing contango structure and mechanically reduces the probability of nearby supply stress. In contrast, EU port stocks remained broadly stable at 35,730 tons, with no material redistribution across key hubs such as Antwerp and Hamburg. The divergence between rising US exchange stocks and flat European port inventories suggests that certification activity is concentrated within the US delivery system rather than reflecting tightening physical availability. Overall, the inventory trajectory currently represents a bearish structural input, as increasing exchange supply undermines any argument for immediate tightness in the nearby contracts.

What to Expect Tomorrow

On the 1-hour chart, price is still trading below declining short- and medium-term moving averages, confirming that the broader intraday trend remains bearish. The recent rebound from the 3,000 area appears corrective rather than impulsive; RSI has recovered modestly but remains below bullish territory, and MACD is attempting to turn but is still positioned under the zero line, indicating that upside momentum lacks structural strength. On the 5-minute chart, price is compressing around the 3,070–3,090 zone, with flattening moving averages and neutral momentum readings, suggesting short-term consolidation rather than reversal. This compression phase increases the probability of a volatility expansion move. A sustained break above 3,100–3,120 with strong volume would be required to shift intraday bias toward a deeper corrective rally, potentially targeting 3,150. However, failure at resistance followed by a break below 3,050 would likely reopen downside pressure toward 3,000, with sub-2,980 levels triggering acceleration. Overall, the short-term structure favors a range-to-break setup with a downside bias unless resistance is convincingly reclaimed.

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.