Profit Taking Ends Cocoa's 20% Weekly Rally (26 June 2026)

• Cocoa fell on Friday as traders locked in profits following Thursday's strong rally, with September NY cocoa settling at 5,107.
• Heavy rainfall across Ivory Coast and Ghana continues to disrupt harvesting, logistics, and crop development.
• Persistent wet conditions are increasing the risk of black pod disease, posing a threat to yields and bean quality.
• Nigeria's May cocoa exports rose 28% y/y to 18,034 MT, providing a modestly bearish supply signal.
• Rabobank still forecasts a 2026/27 global cocoa surplus, arguing that current El Niño weather premiums may be overdone.
• The 7-day forecast remains wet, with up to 140 mm of rain expected across much of the West African cocoa belt.

Cocoa traded under pressure throughout Friday's session as the market consolidated following Thursday's strong rally. After opening near the previous close, the September 2026 contract encountered early selling interest and moved steadily lower during the morning. Prices stabilized around the 5,100 level.

Despite Friday's decline, the contract remained comfortably above the key technical support established during the previous week's breakout, indicating that the broader recovery remains intact. The day's price action was characterized by orderly profit-taking rather than aggressive liquidation, with no signs of panic selling despite the broad-based decline across the futures curve.

Cocoa prices completed an exceptionally strong week, with futures gaining more than 20% and reaching their highest levels in approximately five and a half months before easing lower on Friday.

The week's rally was driven primarily by renewed concerns over the outlook for the upcoming West African crop. Persistent heavy rainfall across Ivory Coast and Ghana has caused localized flooding, disrupted transportation networks, and restricted farmers' access to plantations and export infrastructure. These conditions have increased uncertainty surrounding harvest operations and the timely movement of beans to ports.

Weather data also indicate that cumulative June rainfall in key cocoa-growing regions has already approached normal totals for the entire month. While adequate rainfall is generally beneficial, prolonged wet conditions can promote fungal diseases such as black pod (brown rot), which can damage pods, reduce bean quality, and negatively affect production if moisture persists.

Beyond the current weather pattern, market participants are increasingly focused on longer-term climate risks. Earlier this month, the Japan Meteorological Agency (JMA) confirmed the development of El Niño conditions across the equatorial Pacific. Historically, El Niño events have been associated with warmer and drier weather across parts of West Africa during critical crop development periods, potentially reducing soil moisture and lowering cocoa yields. Forecasts from the U.S. National Oceanic and Atmospheric Administration (NOAA) continue to indicate a high probability that El Niño conditions will strengthen during the second half of the year.

Nigeria's cocoa exports increased 28% year-on-year in May to 18,034 metric tonnes, indicating stronger export availability from one of the world's leading cocoa producers.

Rabobank noted that the recent strength in cocoa prices has been supported by expectations of an emerging El Niño weather pattern, easing geopolitical tensions in the Middle East, and a slower-than-expected development of the 2026/27 West African crop. However, the bank continues to forecast a global cocoa surplus for the 2026/27 season and believes that current El Niño-related weather premiums are somewhat overvalued.

7-Day West Africa Weather Outlook

Weather conditions over the next seven days are expected to remain wet across much of the West African cocoa belt, with repeated rounds of rainfall affecting nearly all major producing regions.

Several cocoa-producing areas are expected to receive up to 140mm of accumulated rainfall, with localized totals potentially exceeding these amounts where thunderstorms repeatedly track over the same locations.

Ivory Coast remains one of the primary areas of concern. Most southern and central producing regions, including the main cocoa belt, are forecast to receive widespread moderate to heavy rainfall. While soil moisture will remain abundant, the persistence of wet conditions may delay harvesting activities, reduce field accessibility, and increase the risk of fungal diseases such as black pod.

Ghana is expected to experience a similar pattern, with frequent showers and thunderstorms across the country's principal cocoa-growing regions. Rainfall totals are likely to be well above seasonal averages in several districts, maintaining saturated soils and creating challenging conditions for farm operations.

In Nigeria, rainfall is forecast to intensify during the period, particularly across the southern cocoa-producing states. Although beneficial for soil moisture, continued heavy rainfall could slow harvesting and transportation while maintaining elevated disease pressure.

Futures Performance

The cocoa market reversed a large portion of Thursday's broad-based rally on 26 June, with both ICE New York and ICE London futures closing lower across the forward curve. Selling pressure was widespread rather than concentrated in a single maturity, resulting in a largely parallel downward shift of both curves. Despite the correction, most contracts retained a significant portion of the gains achieved during the previous session, suggesting profit-taking rather than a fundamental deterioration in market sentiment.

New York Cocoa (CC)

In New York, selling was relatively even across the curve, with losses gradually moderating in the more deferred maturities. The September and December 2026 contracts declined by 117 and 114 points, respectively, while March and May 2027 eased by 104 and 100 points. The fairly uniform pullback indicates broad profit-taking following Thursday's sharp advance rather than aggressive liquidation focused on the nearby contracts.

London Cocoa (C)

London cocoa futures also weakened across the forward curve, although the magnitude of the declines remained smaller than those observed in New York. Losses ranged from 66 points in the nearby July contract to around 85–88 points in the December 2026 and March 2027 maturities before easing slightly further along the curve. The broadly parallel decline suggests a market-wide correction following Thursday's strong rally while preserving the overall structure of the futures curve.

EFP, EFS and Spread Activity

Trading activity remained concentrated in spread transactions, highlighting continued calendar spread positioning despite the weaker outright price action.

New York Cocoa (CC) recorded 968 EFPs, 102 EFSs, and 30,568 spread contracts, compared with 30,568 spreads on the previous session, indicating that inter-month positioning remained active even as outright futures declined. The limited EFP and EFS volumes suggest that physical exchange activity was modest, with most participation focused on futures curve adjustments.

London Cocoa (C) registered stronger exchange-for-physical activity, with 1,502 EFPs and 2,502 EFSs, while spread volume totaled 30,554 contracts. The elevated EFP and EFS activity points to continued commercial hedging and physical market participation, whereas the large spread volume reflects active rolling and relative-value trading across the forward curve rather than directional positioning alone.

The combination of substantial spread trading and relatively modest outright volume indicates that market participants continued to manage forward exposures and roll positions following Thursday's sharp rally, rather than aggressively establishing new directional bets.

US–UK July Spread

(Sep Contract)

$5,107 − (£3,832 x 1.320$/£) =$49ton (down from $57ton)

Volume and Open Interest

Trading activity moderated on Friday, 26 June, following Thursday's exceptionally strong participation. Despite the decline in outright prices, overall turnover remained elevated by recent standards, suggesting that the session was characterized by active position adjustments rather than a withdrawal of liquidity.

In New York (CC), total futures volume reached 49,445 contracts, down from 66,554 contracts on 25 June. While this represented a 25.7% decline in trading activity, volume remained above the month's average, reflecting continued engagement after Thursday's sharp rally. Preliminary exchange data did not report total open interest for 26 June, preventing a day-over-day comparison. As of 25 June, open interest stood at 183,438 contracts, indicating that market participation had remained broadly stable heading into Friday's session.

In London (C), total volume eased to 47,479 contracts from 58,889 contracts on the previous day, a decline of approximately 19.4%. Although turnover slowed, it remained one of the stronger trading sessions of the month. Total open interest increased marginally to 237,598 contracts, compared with 237,586 contracts on 25 June. The combination of lower prices and virtually unchanged open interest suggests that new short selling was broadly matched by fresh buying interest, rather than widespread long liquidation.

Commitment of Traders (COT) Analysis

The latest Commitment of Traders (COT) reports for the week ending 23 June 2026 continue to paint a constructive picture for the cocoa market, although investor positioning differs between the New York and London exchanges. Overall, market participants appear to be reducing directional risk while maintaining confidence in the medium-term outlook, with London displaying notably stronger bullish positioning than New York.

In ICE New York, speculative funds modestly reduced both long and short positions, but the larger reduction in bearish positions resulted in a slight improvement in the net speculative position. While managed money remains significantly net short, the continued short covering suggests that bearish conviction is gradually weakening. At the same time, commercial traders reduced both long and short hedges, reflecting lower overall hedging activity rather than a meaningful shift in underlying sentiment. The decline in total open interest indicates that some participants exited positions during the reporting week, consistent with a period of consolidation ahead of the sharp price rally that followed later in the week.

The ICE London report presents a more constructive picture. Investment funds maintained their sizeable net long position by adding both long and short contracts, indicating continued confidence in cocoa despite recent volatility. More importantly, commercial participants significantly increased long positions while reducing short hedges, representing a clear improvement in commercial sentiment. This shift suggests stronger buying interest from participants with direct exposure to the physical cocoa market and reduced producer selling pressure, reinforcing the positive underlying fundamentals.

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:

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Cocoa Market Outlook for Monday

For Monday, the 5,050-5,100 area represents the first important support zone. Holding above this region would maintain the current recovery structure and could encourage renewed buying interest. Initial resistance lies near 5,250-5,300, followed by the recent high around 5,400. A sustained move above that level would strengthen the case for an extension toward the longer-term moving averages.

Overall, the outlook for Monday is cautiously bullish. Friday's decline appears to have been a normal consolidation after Thursday's exceptional rally, with technical indicators, volume patterns, and positioning data continuing to favor the medium-term recovery. Unless prices break decisively below the recent support zone, the balance of evidence suggests that buyers retain the advantage heading into the new trading week.

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.