Daily Cocoa Market Report (20 March 2026): Cocoa Extends Losses on Strong Dollar and Improving Supply Outlook

Cocoa prices moved lower on Friday, with New York cocoa falling to a two-week low. The decline was primarily driven by macro factors, notably a stronger U.S. dollar.

There were no major fundamental developments on Friday. Price action appeared largely technical, with the market reacting to macro conditions and ongoing positioning rather than fresh news flow.

Cocoa Weather

Cocoa market analysis with zero sugar-coating.

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Futures Performance

ICE New York Cocoa (CC)

In New York, the decline is pronounced across the curve, with front-month May-26 losing over 100 points and deferred contracts posting progressively smaller losses. The structure of the move suggests a parallel shift lower rather than a reshaping of the curve, indicating systematic long liquidation rather than a targeted repositioning along the term structure.

ICE London Cocoa (C)

London cocoa followed the same directional move but with significantly lower magnitude. Front-month losses were contained to 25 points, while the back end saw only marginal declines. This relative resilience in London implies either stronger local support or reduced speculative length compared to New York. The flatter response across maturities also indicates limited pressure on the forward curve.

EFP, EFS and Spread Activity

In New York cocoa, EFP activity was limited, with only 334 lots recorded and concentrated in the nearby May-26 contract. This suggests minimal physical hedging or cash-to-futures conversion flows during the session, reinforcing the view that the price action was primarily driven by financial positioning rather than underlying physical market activity.

EFS activity, however, was more visible, with 1,020 lots executed, entirely in the Mar-27 contract. This concentration in the deferred tenor points to selective switching between futures and swaps further along the curve, potentially reflecting structured positioning or adjustments by commercial participants in longer-dated exposures.

Spread activity remained elevated, totaling 19,178 lots, with the bulk concentrated in the front and mid-curve (notably May-26 and Jul-26). This indicates continued intra-curve repositioning, likely linked to roll-related flows and relative value strategies. The persistence of strong spread volume alongside declining outright prices suggests that the session’s move was not purely directional but involved active management of curve exposure.

In London cocoa, EFP activity was more substantial at 692 lots and more evenly distributed across the curve, pointing to a slightly stronger linkage with the physical market compared to New York. EFS volumes reached 819 lots, with a notable concentration again in the Mar-27 contract, mirroring the pattern seen in New York and indicating coordinated activity in longer-dated instruments.

Spread trading in London totaled 13,668 lots, also concentrated in the nearby contracts but with a smoother distribution along the curve. The relatively high spread participation, combined with modest outright declines, supports the interpretation of a controlled and technically driven correction, with participants actively adjusting calendar positions rather than exiting the market aggressively.

Forward Curve

The forward curve in New York remains in a pronounced contango, with deferred contracts trading at a premium to the front month. Despite the outright decline, the curve structure held broadly stable, indicating that the move was largely parallel and not driven by changes in term structure expectations. The gradual flattening of price increments further along the curve suggests diminishing bullish conviction in longer-dated contracts.

In London, the curve also maintains a contango structure but with a flatter profile compared to New York. The smaller day-on-day moves preserved the existing shape, with limited impact on spreads. This reinforces the view of a technically driven correction rather than a structural shift.

US–UK May Spread

$3,245 − (2419 x 1.334$/£) =$18 ton (down from $64)

Volume and Open Interest

ICE New York Cocoa (CC)

In New York, total volume declined to 35,169 on 20 March from 39,291 on 19 March, remaining broadly within the recent range but below the peaks seen earlier in the period. The pullback in activity alongside falling prices suggests a lack of aggressive participation on the downside, consistent with a controlled correction rather than capitulation. Open interest data for 20 March is not yet available, but the prior session showed an increase to 191,680, indicating that the previous rally was supported by fresh positioning rather than short covering.

ICE London Cocoa (C)

In London, volume also eased to 24,015 from 25,949 on 19 March, continuing the generally softer activity profile relative to New York. The decline in turnover aligns with the more muted price action, reinforcing the view of reduced speculative intensity. Open interest stood at 202,209 on 19 March, maintaining a stable to slightly rising trend over recent sessions, which points to steady participation without significant liquidation pressure.

COT Analysis

In New York cocoa, total open interest declined by 8,146 contracts to 246,189, indicating a net reduction in market participation. The move was driven primarily by non-commercial activity, where longs decreased by 1,505 contracts and shorts by 3,308, alongside a notable reduction in spreads (-5,160). This points to a clear deleveraging phase, with speculative participants reducing exposure following the prior volatility.

Commercial positioning showed limited adjustment. Longs declined marginally (-288), while shorts increased slightly (+138), suggesting that trade hedging activity remained relatively stable. The commercial net position therefore shifted marginally more short, but without aggressive re-hedging flows.

Non-reportable positions also declined modestly on the long side (-1,194), reinforcing the broader theme of position reduction across smaller participants.

In London cocoa, positioning changes were more nuanced. Producer/merchant shorts increased (118,650 vs 115,734 prior), while longs edged lower, indicating increased forward selling or hedge extension from the commercial side. Swap dealers reduced length (57,124 vs 54,747 prior) and increased shorts, pointing to some unwinding of intermediary positioning.

Managed money reduced longs (6,942 vs 7,181) while also trimming shorts (35,241 vs 35,680), but the net position remains decisively short. The reduction in both sides suggests position compression rather than a directional shift.

Both markets reflect a phase of position cleanup rather than fresh directional conviction. In New York, the signal is clearer with outright reduction in speculative exposure, while in London the adjustment is more balanced across categories. The persistence of a net short bias in managed money, particularly in London, suggests that the broader bearish positioning remains intact despite recent price recovery.

Cocoa COT Report (Commitment of Traders)

Weekly Cocoa COT report showing speculative funds and commercial trader positions in ICE US and ICE Europe cocoa futures.

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Exchange Trading Volume

These figures refer only to ICE Deliverable Stocks (Exchange-Visible)

Readers can explore detailed cocoa market datasets, futures statistics, and historical indicators in the CocoaIntel Data Hub:

Data

📊 Grindings 📦 Inventory / Certified Stocks 🚢 Import / Export Flows ⚖️ Stock-to-Grind Ratio 📈 Futures Contracts 🔄 Futures Curve & Spreads 🧠 COT / Positioning 🚚 Port Deliveries 🌧️ Weather Dashboard 🌀 Options & Volatility 📅 Seasonality 📑 Institutional Reports 🗓️ Cocoa Calendar This section is currently under active development. We are building a structured, transparent cocoa market data platform covering futures analytics, certified stocks, positioning

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What to expect on Monday

Technically, May-26 New York cocoa enters Monday in a consolidation phase after stabilizing above recent lows. While the daily chart suggests the liquidation wave has eased, the contract remains below major medium- and long-term moving averages, keeping the broader trend bearish. Short-term indicators point to fading rebound momentum, with resistance clustered around 3300–3330 and initial support at 3235–3200. Unless the market reclaims overhead resistance decisively, Monday’s trade is more likely to unfold as range-bound to slightly weaker, with sellers expected to re-emerge on rallies.

If you notice any discrepancies in these figures or have extra information, please email [email protected] or leave a comment – corrections and additional insights are always welcome.