Daily Cocoa Market Report (12 Jan 2026): Market Waits for Clear Demand Signals

Cocoa futures closed higher in both New York and London, recovering from early weakness as the session progressed. In New York, the March contract settled at $5,406, up 94 points (+1.77%) from the prior close, after spending much of the session under pressure before stabilising into the close. London followed with a more modest recovery, with the March contract ending at £3,939, up 22 points (+0.56%). Trading volumes remained elevated across both markets, with roughly 70,000 contracts traded in New York and over 50,000 contracts in London, confirming sustained participation following last week’s sharp liquidation. The prior decline coincided with falling open interest, indicating that the sell-off was driven primarily by long liquidation rather than the establishment of new short positions. Monday’s rebound therefore reflects short-covering and price re-acceptance, rather than a decisive shift back to trend-driven buying.

Ivory Coast Grindings

For Q4 2025, GEPEX grindings declined 9.2% year-on-year, a contraction that reflects operational constraints, bean availability, and margin pressure at origin, rather than downstream demand destruction. Importantly, this decline was significantly smaller than prior expectations, outperforming forecasts that had pointed to a drop of more than 17%.

December grindings showed year-on-year growth, indicating a degree of late-quarter stabilisation in Ivorian processing activity. This suggests that while high bean prices and supply tightness have constrained throughput, origin processors remain active, and capacity has not been structurally impaired. As such, GEPEX data should be interpreted as supply-side friction, not a signal of weakening global chocolate consumption.

Milling data due later this week is expected to show uneven regional demand adjustment rather than a broad-based collapse, according to forecasts from CRA and TRS. In Europe (ECA), both analysts anticipate only a modest decline, with CRA forecasting a 0.3% year-on-year drop and TRS projecting a slightly larger contraction of up to 2%, indicating relative resilience despite elevated cocoa prices. In North America (NCA), forecasts diverge, with CRA expecting a 5.8% decline, while TRS sees potential growth of up to 3% due to the inclusion of two new mills in the reporting base, highlighting a methodological effect rather than a fundamental improvement in demand. By contrast, Asia (CAA) is expected to record a significant contraction, with CRA forecasting an 11.7% decline and TRS estimating a drop of between 10% and 14%, reflecting greater price sensitivity and weaker discretionary consumption. Overall, the outlook points to selective demand erosion concentrated in Asia, while Europe and North America remain comparatively more stable.

Lindt & Sprüngli

Lindt & Sprüngli’s latest trading update reinforces the theme of strong downstream pricing power in the cocoa and chocolate value chain. The company reported 12.4% organic sales growth in 2025, driven primarily by price increases of around 19%, which were successfully passed on to consumers. Importantly, Lindt also guided for a modest improvement in operating margins, underscoring that higher cocoa costs are being absorbed and transferred rather than choking end-market demand. For the cocoa market, this is structurally supportive: it confirms that premium chocolate demand remains resilient, limiting the scope for sustained demand-led price weakness despite softer grind figures.

BCOM

Recent analysis highlights a clear disconnect between visible exchange data and the true scale of cocoa trading activity, with a significant share of positioning occurring off-exchange through OTC contracts. The relatively muted and, at times, counter-intuitive movements in reported commitments and prices following announcements about cocoa’s inclusion in major commodity indices do not signal a lack of speculative interest. Instead, they point to substantial pre-positioning that took place well ahead of the announcements and largely outside the New York and London exchanges. Swap dealers were steadily adding long hedges from July through mid-October 2025, with positions peaking near 44,000 lots just before the Bloomberg announcement, broadly in line with estimates of expected index fund demand. This strongly suggests that index funds were already largely positioned before the formal announcement. In addition, the inclusion of New York cocoa in the Bloomberg Commodity Index appears to have been mostly priced in, with index funds securing a significant portion of their exposure via increased trade-at-settlement (TAS) activity rather than through visible post-announcement buying in outright futures. As a result, standard COT data materially understates total market exposure, as dealers’ exchange positions mainly serve to hedge OTC risk rather than reveal the true scale or direction of index-related flows. Overall, recent cocoa price formation appears to have been driven more by advance positioning and off-exchange activity than by headline exchange data, reducing the reliability of visible commitments as a standalone measure of speculative pressure or forward price risk.

Cocoa arrivals at Ivory Coast ports

Since the start of the season on October 1, total arrivals at Ivorian ports reached approximately 1.125 million metric tons by January 11, representing a 2.8% decline compared with the same period last year.

Cocoa arrivals at Ivory Coast ports reached 1.125 million metric tons by January 11

Cocoa arrivals at ports in Ivory Coast have fallen behind last season’s levels in the early part of the 2025/26 campaign, according to exporter estimates. Since the start of the season on October 1, total arrivals at Ivorian ports reached approximately 1.125 million metric tons by January

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Weather

Weather conditions in Côte d’Ivoire remain favourable for both the late-stage main crop and the early development of the April–September mid-crop, according to farmer feedback reported by Reuters. Although the country is currently in its dry season (mid-November to March), above-average rainfall was recorded last week across most key cocoa-growing regions, supporting soil moisture and encouraging flowering. Farmers report that flowers are beginning to bloom, signalling a constructive start to the mid-crop, while sufficient pods remain on trees to allow the main crop harvest to extend into late March. Weekly average temperatures ranged between 27.3°C and 31°C, within a supportive range for cocoa tree development.

According to Reuters, farmers noted that “the mid-crop is off to a good start. The trees have been well watered and the flowers are beginning to bloom,” with Joel Atta, a farmer near Bongouanou, citing 7 mm of rainfall last week, above the five-year average. Similar conditions were reported in Daloa and Yamoussoukro, while even regions with below-average rainfall benefited from adequate soil moisture following earlier rains. Farmers broadly agreed that “the weather is favourable for the development of the mid-crop and also for the end of the main crop season,” reinforcing expectations that near-term supply risks remain weather-benign despite structural tightness in the market.

Futures Performance

US – ICE Cocoa Futures (CC)

UK – ICE London Cocoa Futures

Contango / Backwardation
The cocoa forward curve remains largely flat to mildly contangoed, with no sustained backwardation evident across the main delivery months. Nearby contracts continue to trade at a modest discount to deferred months, particularly in New York, indicating that the market is pricing ongoing supply tightness without immediate physical stress. The absence of persistent backwardation suggests that, despite elevated prices and inventory concerns, there is no acute prompt shortage forcing buyers to pay up for immediate delivery. Instead, the current curve structure reflects a market in balance between near-term risk premiums and expectations of gradual supply normalization later in the season. Intermittent front-month firmness should therefore be interpreted as risk repricing and positioning adjustments, rather than a signal of outright physical scarcity.

US–UK Spread

5,406 − (3939 x 1.346$/£) = 104 USD (up from 51USD)

Volume and Open Interest

US – ICE Cocoa Futures (CC)

UK – ICE London Cocoa Futures (C)

Trading activity accelerated materially into early January, with both New York and London volumes rising sharply ahead of and during the 9 January sell-off, followed by sustained but slightly lower participation on 12 January. In New York, total volume peaked at 82,465 lots on 9 January, coinciding with a sharp price decline, while open interest fell from 132,595 to 131,521, indicating net position reduction and liquidation rather than fresh short initiation. This pattern is consistent with long liquidation and forced risk reduction rather than a structural bearish shift.

London displayed a similar dynamic, with volumes climbing steadily into 9 January (45,333 lots) as open interest continued to rise, reaching 164,902, suggesting a more gradual transfer of risk rather than abrupt position exit. The absence of open interest data for 12 January notwithstanding, elevated volumes on that session (50,570 lots in London and 70,127 lots in New York) alongside higher closes indicate short-covering and re-risking activity, rather than renewed selling pressure.

Overall, the combined volume and open interest behavior confirms that the late-week price collapse was driven primarily by position unwinding, while the subsequent rebound reflects price re-acceptance in a structurally tight market, not the start of a new speculative expansion phase.

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What to Expect Tomorrow

Cocoa futures are likely to open cautiously firmer but technically constrained, with price action dominated by short-term consolidation rather than trend continuation.

From a technical perspective, US cocoa is stabilising around the 5,400 zone, which is emerging as a short-term pivot after the sharp liquidation seen last week. On the intraday charts, price has reclaimed short-term moving averages but remains below the declining medium-term averages, indicating that the rebound is corrective rather than impulsive. Momentum indicators support this view: RSI has recovered into neutral territory, relieving oversold conditions, while MACD remains negative, showing that downside momentum has slowed but not reversed. Stochastic indicators are rolling over from mid-range levels, suggesting limited immediate upside follow-through unless fresh buying enters.

On the hourly and daily timeframes, volatility has compressed following the sell-off, pointing to a potential range-bound session. Immediate resistance is expected near 5,480–5,550, where multiple moving averages and prior breakdown levels converge. A failure to clear this zone would likely invite renewed selling pressure. On the downside, 5,300–5,250 remains the key support band; a break below this area would reopen downside risk and challenge the recent rebound narrative.

From a flow and positioning standpoint, elevated volumes combined with stabilising prices suggest that forced liquidation has largely run its course, but there is still no evidence of aggressive new length entering the market. Without a fresh catalyst, such as adverse West African weather updates, inventory shocks, or policy headlines, price action is expected to remain technically driven.

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.