Daily Cocoa Market Report (27 March 2026):Cocoa Market Stabilizes
News flow into the end of the week remained relatively light, with no major market-moving developments, reinforcing the predominantly technical nature of recent price action.
Weather conditions in West Africa continue to be mixed. According to CRA, cumulative 30-day rainfall in Ivory Coast and Ghana is at or above 100mm, while afternoon temperatures remain elevated at around 37°C. This combination points to adequate moisture but persistent heat stress, leaving the outlook broadly balanced without a clear directional signal for crop development.
Cocoa Intel
On the macro side, NOAA’s latest March update assigns a 62% probability of an El Niño developing between June and August, with a 33% chance of it strengthening into a significant event by year-end. While still forward-looking, this maintains a latent weather risk premium in the market, particularly for the 2026/27 crop cycle.
Regarding regulatory developments, the latest updates on the EU Deforestation Regulation (EUDR) were published earlier in the week, around 25–26 March, based on European Commission communications and industry circulation. These updates did not introduce materially new elements but continue to be monitored closely by the cocoa sector given their longer-term implications for traceability and supply chain compliance.
EUDR Developments
Updates circulated during the week did not introduce a structural change to the framework, but provided additional clarification and operational guidance that is relevant for the cocoa trade.
The European Commission’s communication focused primarily on implementation mechanics rather than policy revision. The key emphasis remains on the requirement that all cocoa entering the EU market must be demonstrably deforestation-free (post-31 December 2020 cutoff) and fully traceable to the plot level. What has evolved is the degree of clarification around how operators are expected to comply in practice.
One of the more relevant points for the industry is increased guidance on due diligence systems, particularly around geolocation data collection and verification. The Commission is reinforcing that operators must be able to provide precise polygon data for sourcing areas, not just regional or cooperative-level traceability. This continues to raise execution challenges for origin countries where farm mapping is still incomplete.
There was also further clarification on the benchmarking system, under which producing countries will be classified as low, standard, or high risk. While no final country classifications were announced in these updates, the signaling suggests that this categorization will be central to determining the intensity of compliance checks and documentation requirements. For cocoa, this remains a critical variable, as West African origins are unlikely to fall into the low-risk category.
Additionally, the updates touched on timelines and transitional readiness, with continued emphasis that companies must have systems in place ahead of the enforcement deadline. While there has been ongoing industry lobbying for delays or phased implementation, the current communication does not confirm any material postponement, implying that regulatory pressure on supply chains will continue to build through 2026.
Futures Performance
Friday’s session reflects a continued stabilization phase following earlier liquidation pressure. The upward adjustment across both markets is broadly parallel, but the absence of strong front-end leadership in NY indicates that nearby fundamentals remain subdued. Meanwhile, the more consistent strength in London and the outperformance of deferred contracts point to ongoing short-covering and curve-wide repositioning. The structure does not yet indicate a decisive bullish shift, but rather a gradual rebuilding of confidence further along the curve.
NY Cocoa Futures (CC)
| Contract | 26-Mar | 27-Mar | Change |
|---|---|---|---|
| May-26 | 3,162 | 3,161 | -1 |
| Jul-26 | 3,221 | 3,226 | +5 |
| Sep-26 | 3,284 | 3,286 | +2 |
| Dec-26 | 3,377 | 3,386 | +9 |
| Mar-27 | 3,442 | 3,450 | +8 |
NY cocoa futures closed broadly firmer relative to Thursday’s settlement, although the move lacked front-end strength. The May-26 contract edged slightly lower, indicating that nearby demand conditions remain soft. In contrast, the rest of the curve shifted higher, with the most pronounced gains in Dec-26 and Mar-27. This pattern confirms a continuation of back-end support, consistent with positioning-driven flows rather than a tightening in prompt supply-demand dynamics.
London Cocoa Futures (C)
| Contract | 26-Mar | 27-Mar | Change |
|---|---|---|---|
| May-26 | 2,354 | 2,369 | +15 |
| Jul-26 | 2,386 | 2,404 | +18 |
| Sep-26 | 2,410 | 2,431 | +21 |
| Dec-26 | 2,465 | 2,482 | +17 |
| Mar-27 | 2,491 | 2,515 | +24 |
London cocoa futures displayed a stronger and more uniform upward move across the curve. All contracts posted gains, with a clear acceleration toward the deferred end. The Mar-27 contract led with a +24 increase, reinforcing the relative strength in longer-dated positions. Unlike NY, the front contract also participated meaningfully, suggesting a more balanced recovery profile across maturities.
EFP, EFS and Spread Activity
EFP activity in cocoa remained present but not dominant, with a clear concentration in nearby and mid-curve contracts. In NY, volumes were relatively light and heavily skewed toward May-26, indicating limited physical-related flow and suggesting that cash-to-futures conversion interest was not a primary driver of price action. London, by contrast, recorded more substantial EFP volumes, particularly in Sep-26 and the front months, pointing to a more active linkage between physical market participants and the futures curve.
EFS activity was entirely absent across both markets, confirming that swap-related flows did not play a role in Friday’s session.
Spread trading was the dominant feature of the day. Both NY and London showed elevated spread volumes relative to EFP, with activity concentrated in the Jul-26 and Sep-26 contracts. This indicates active calendar positioning, likely driven by rolling activity and intra-curve adjustments rather than outright directional conviction. The strength of spread flows, particularly in the mid-curve, aligns with the observed parallel upward shift in prices and reinforces the view that the session was driven primarily by technical repositioning and short-covering rather than a change in underlying fundamentals.
US–UK May Spread
$3,161 − (2369 x 1.326$/£) =$20ton (down from $25)
Volume and Open Interest
Trading activity continued to moderate into Friday, with volumes declining in both NY and London cocoa futures, reinforcing the view of a market transitioning out of the earlier high-volatility phase.
| Date | Volume | Open Interest |
|---|---|---|
| Mar 21* | 35,169 | 191,627 |
| Mar 23 | 33,566 | 192,646 |
| Mar 24 | 30,932 | 194,510 |
| Mar 25 | 32,167 | 198,041 |
| Mar 26 | 27,316 | 198,832 |
| Mar 27 | 24,817 | — |
In NY cocoa, total volume fell to 24,817 contracts on 27-Mar, marking a steady decline from 32,167 on 25-Mar and 27,316 on 26-Mar. This represents a clear contraction in participation following the earlier peak above 40k seen mid-month. The drop in volume alongside stabilizing prices suggests reduced liquidation pressure and a shift toward more orderly positioning rather than aggressive directional trading. Open interest data is not reported for 27-Mar, but the prior trend showed a consistent build-up to 198,832 on 26-Mar, indicating that earlier sessions were characterized by net position accumulation rather than closure.
| Date | Volume | Open Interest |
|---|---|---|
| Mar 21* | 24,015 | 204,115 |
| Mar 23 | 20,941 | 204,548 |
| Mar 24 | 21,814 | 206,068 |
| Mar 25 | 25,276 | 210,883 |
| Mar 26 | 23,268 | 212,730 |
| Mar 27 | 22,218 | — |
London cocoa followed a similar pattern, with volumes easing to 22,218 contracts on 27-Mar from 25,276 on 25-Mar and 23,268 on 26-Mar. The decline is less abrupt than in NY but still consistent with a broader reduction in trading intensity. In contrast to NY, open interest continued to rise steadily, reaching 212,730 on 26-Mar from 206,068 on 24-Mar. This persistent increase in open interest, even as volumes taper, points to ongoing position building and suggests that participants are maintaining or adding exposure rather than exiting the market.
The combination of declining volume and previously rising open interest across both markets supports the interpretation of a stabilization phase. The market appears to be moving away from forced liquidation toward more deliberate positioning, with reduced turnover but sustained underlying interest, particularly evident in London.
COT Analysis
The latest COT data for ICE US cocoa shows a continuation of the established structure, with non-commercials holding a net short position of 22,176 contracts, while commercials remain net long by 21,574 contracts. Over the week, non-commercials increased both long and short exposure, but the stronger build on the short side indicates a further extension of bearish positioning. At the same time, commercials expanded their long exposure more aggressively than their shorts, reinforcing their role as the primary counterparty to speculative selling. This confirms that the market remains driven by opposing flows, with no clear capitulation on either side.
In London cocoa, positioning is more segmented but conveys a similar underlying dynamic. Managed money remains heavily net short at 30,376 contracts and continued to build short exposure over the week, reinforcing a bearish bias. Producers remain structurally net short, although with some marginal reduction in exposure, while swap dealers hold a substantial net long position of 44,777 contracts, acting as the main offset to speculative pressure. Other reportables and nonreportables play a relatively minor role in overall positioning.
Across both markets, the key feature is the continued expansion in gross positions rather than reduction, which aligns with the observed increase in open interest during the same period. This indicates that the recent price stabilization is not driven by position liquidation but rather by active positioning on both sides. The market remains in a balanced but tense configuration, where growing speculative shorts are being absorbed by commercial and dealer buying. This structure leaves the market vulnerable to short-covering rallies, but without yet signaling a decisive shift toward a sustained bullish trend.
Cocoa Intel
Exchange Trading Volume
| Market | 26-Mar Stocks | 27-Mar Stocks | Change | % Change |
|---|---|---|---|---|
| US | 2,352,671 | 2,357,294 | +4,623 | +0.20% |
| UK | 625,313 | 625,313 | 0 | 0.00% |
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:
Cocoa IntelWhat to expect on Monday
The most probable scenario is range-bound to slightly higher trade, with the market attempting to test the 3,200–3,250 resistance zone. A clean break above this area would open a short-covering extension toward 3,300, but current momentum does not strongly support an impulsive move.
On the downside, failure to hold above 3,120 would signal that the consolidation is breaking lower, exposing the 3,000 level again. However, given the loss of bearish momentum and recent stabilization, immediate downside acceleration appears less likely unless triggered by external factors.
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.
