Daily Cocoa Market Report (5 Feb 2026): Cocoa Market Stabilises After Liquidation as Positioning Resets

Market Overview

Cocoa futures staged a sharp technical rebound on 05-Feb, fully reversing the broad, curve-wide liquidation seen on 04-Feb. The recovery was orderly and volume-supported, indicating short-covering and tactical re-risking, rather than fresh speculative length.

The prior session’s decline (-4% to -5% across US contracts) showed no curve distortion, confirming systematic de-risking rather than delivery pressure. Yesterday’s bounce retraced a meaningful portion of that move, stabilising near key technical reference levels.

Several major chocolate producers have reported higher revenues but weakening volumes as elevated cocoa costs are passed through to customers:

• The Hershey Company reported that its overall sales volumes fell about 3%, while pricing actions drove a roughly 9% increase in net sales revenue in the latest period, reflecting significant pass-through of higher cocoa and input costs to consumers. Hershey also projected net sales growth of 4–5% for 2026.
• Barry Callebaut reported a 9.9% decline in sales volumes in the first quarter of its 2025/26 financial year, even as revenue rose by about 8.9% in constant currency, underscoring the impact of high cocoa prices on demand. Over the full 2024/25 fiscal year, volumes were down approximately 6.8% while revenue jumped around 49%.
• Mondelez International posted a 9.3% increase in fourth-quarter revenue, driven by higher pricing, but noted that volumes fell by about 4.8 percentage points year-on-year, reflecting slowing consumer demand as prices rose.

By contrast:

• Tony’s Chocolonely reported a 20% increase in sales revenue and a 4% rise in unit sales volumes in its latest reporting period, a rare volume gain in an industry facing broad consumer resistance to higher retail prices.

Industry analysts say these figures highlight the tension between pricing strategies to offset elevated cocoa costs and volume declines as consumers trade down or reduce purchases, with smaller premium brands like Tony’s better able to maintain demand growth.

A market dealer said Ghana, the world’s second-largest cocoa producer, has acknowledged that international traders have increasingly switched their bean sourcing away from the country, citing higher-priced Ghanaian cocoa as a key deterrent. Cocoa farmgate prices in both Ghana and Ivory Coast are set semi-annually by state cocoa regulators and are currently well above prevailing global market levels. This pricing disconnect has reduced the competitiveness of origin supply, encouraging buyers to seek alternative sources and contributing to a build-up of unsold cocoa stocks within both producing countries. Market participants warn that unless global prices rise further to realign with origin pricing, inventory accumulation could intensify, adding complexity to the physical supply outlook despite the broader structural deficit narrative.

Futures Performance

ICE US Cocoa Futures (CC)

ICE London Cocoa Futures (C)

Cocoa futures posted a sharp, technically driven rebound on 05 February, retracing a meaningful portion of the prior session’s curve-wide liquidation that had averaged losses of roughly 4–5% across US contracts. The recovery was orderly and broadly distributed along the curve in both New York and London, with the back months slightly outperforming, a pattern consistent with short-covering rather than fresh speculative length initiation. Importantly, the absence of curve distortion or front-month stress confirms that neither the sell-off nor the rebound was delivery-driven, instead reflecting systematic risk reduction followed by tactical re-risking after the market failed to extend lower. Volume levels were healthy but not aggressive, reinforcing the view that participants were stabilising positions rather than repositioning for a renewed trend. Structurally, the market continues to respect longer-term supply tightness, but current price behaviour signals a transition into a high-volatility consolidation phase, where two-way flows dominate and directional conviction remains limited until either resistance near recent highs is decisively reclaimed or renewed liquidation pressure re-emerges.

Contango/Backwardation

Both the ICE US and ICE London cocoa curves are firmly in contango across all listed 2026 and 2027 contracts, with prices rising progressively from the front months through the deferred maturities. In New York, the Mar-26 to Dec-26 structure shows a steady upward slope, and this carry persists further into the 2027 strip, indicating that the market is currently pricing time value, financing, and uncertainty premiums, rather than immediate physical tightness. London mirrors this structure almost identically, with no signs of front-end scarcity or delivery stress, confirming that nearby supply availability is adequate despite the broader structural deficit narrative. The uniformity of the contango across both exchanges and across the curve suggests that recent volatility has been driven by positioning and macro risk management, not by physical squeeze dynamics. Importantly, the absence of backwardation means the market is not yet incentivising aggressive stock release, nor is it signalling acute near-term supply disruption. Until contango begins to flatten or invert, particularly in the Mar–May or Mar–Jul spreads, the cocoa market should be viewed as structurally tight but not operationally constrained, with price action remaining vulnerable to sharp two-way adjustments driven by speculative flows rather than physical fundamentals.

US–UK Spread

4,182 − (3,067 x 1.353$/£) =$32 ton (up from $-22/ton)

On 04 February 2026, the US–UK cocoa spread briefly inverted, with New York trading at a USD 22 discount to London, reflecting the impact of aggressive, curve-wide liquidation in US contracts rather than any shift in underlying physical differentials. This inversion proved short-lived. During the 05 February rebound, New York prices recovered more decisively than London, restoring the traditional premium and pushing the spread back to approximately USD 32 in favour of US cocoa. The speed and symmetry of this re-normalisation underscore that the prior inversion was positioning-driven and technical in nature, not a signal of relative supply tightness between origins or delivery systems. The re-establishment of the US premium confirms that inter-market arbitrage relationships remain intact and that recent volatility reflects transient risk adjustments rather than a structural repricing of Atlantic Basin cocoa flows.

Volume & Open Interest

Across the second half of January into early February, both US and London cocoa markets exhibited a clear expansion in open interest, confirming that the broader uptrend and subsequent volatility were accompanied by net position building rather than mere churn. In US cocoa, open interest rose steadily from ~140k contracts in mid-January to a peak above 161k by 04-Feb, indicating sustained speculative and commercial engagement as prices pushed higher. This rise occurred alongside multiple high-volume sessions (notably 20-Jan, 30-Jan, and 04-Feb), signalling active risk accumulation, not short-term scalping.

The sharp sell-off on 04-Feb occurred on elevated volume, consistent with forced liquidation or systematic de-risking, rather than a quiet pullback. Crucially, the rebound on 05-Feb maintained healthy but slightly lower volume, suggesting that the recovery was driven more by short-covering and tactical repositioning than aggressive new long creation. While US open interest data for 05-Feb is not yet published, the price-volume relationship strongly implies OI stabilisation rather than collapse, meaning that the market flushed weak length but did not dismantle the broader positioning structure.

In London, the signal is even clearer. Open interest rose almost uninterrupted from ~161k to over 183k contracts by 04-Feb, confirming that European cocoa participation has remained structurally committed despite volatility. Volume spikes were present during both the sell-off and rebound phases, but there was no evidence of mass position exit, reinforcing the view that London continues to act as the structural anchor market, with New York absorbing more of the speculative volatility.

Certified Cocoa Inventory Stocks

ICE US & ICE London

Certified cocoa inventories continue to display a divergent transatlantic pattern, with the US market registering a notable stock build on 05 February while London recorded a modest drawdown. The US increase of 11,667 bags represents a continuation of the steady accumulation trend observed since mid-January, reinforcing the view that deliverable supply is being preferentially positioned into the New York delivery system. This sustained build materially reduces near-term delivery risk in the US contract and aligns with the persistent contango structure observed across the curve, where the market is not incentivising immediate stock release.

In contrast, London inventories edged lower by 469 bags, a relatively minor move in absolute terms but directionally important given the otherwise stable European stock profile in recent weeks. The absence of a corresponding stock build in London suggests that European warehouses are not attracting the same incremental inflows, preserving a tighter relative supply balance versus the US system. However, the scale of the draw remains insufficient to generate backwardation pressure or delivery stress at this stage.

What to Expect Tomorrow

Cocoa is entering the next session in a compressed, post-rebound consolidation phase, with price holding just above the 4,180–4,200 pivot zone, a level that has now been repeatedly tested across intraday and higher timeframes. On the 5-minute and 1-hour charts, momentum has faded following the rebound, with RSI drifting below neutral and MACD flattening, signalling loss of upside impulse rather than immediate reversal. Short-term moving averages are converging, which typically precedes either a volatility expansion or a continuation grind.

On the hourly timeframe, price remains capped below declining medium-term averages, indicating that rallies are still being sold into rather than chased. However, downside follow-through has been limited, suggesting selling pressure is no longer aggressive. This points to a likely range-bound session, with price oscillating between ~4,150 support and 4,250 resistance, unless a clear catalyst emerges.

From a daily perspective, the market remains structurally weak below major trend averages, but oscillators are no longer oversold, reducing the probability of another sharp liquidation leg tomorrow. The weekly chart reinforces this view: while the broader trend is still corrective, price is stabilising after a prolonged decline, which statistically favours pause or corrective bounce rather than trend 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.