Group 1: Cocoa Price Movements - Cocoa prices are experiencing a significant increase, with December ICE NY cocoa up by 2.88% and London cocoa up by 2.06% [1][2] - NY cocoa has reached a 1.5-week high due to weather concerns in West Africa, particularly heavy rain in the Ivory Coast affecting cocoa field access [2][4] Group 2: Supply and Inventory Factors - Tighter cocoa inventories are supporting price increases, with ICE-monitored cocoa inventories in US ports falling to a 4.25-month low of 2,092,823 bags [4] - The pace of cocoa exports from the Ivory Coast has slowed, with shipments totaling 1.82 million metric tons (MMT) this marketing year, reflecting a 5.8% increase from last year but a decrease from a previous 35% increase [4] Group 3: Demand and Quality Concerns - Weak global cocoa demand has negatively impacted prices, with European cocoa grindings down by 7.2% year-on-year and Asian grindings down by 16.3% year-on-year [10] - Quality issues with the Ivory Coast's mid-crop cocoa, attributed to late rain, are supporting prices, with the average estimate for this year's mid-crop at 400,000 MT, down 9% from last year [8] Group 4: Production Outlook - Optimism regarding this year's cocoa crop harvest in West Africa is present, with a cocoa pod count reported to be 7% above the five-year average [6] - Ghana's cocoa production is projected to increase by 8.3% year-on-year for the 2025/26 crop year, which may exert downward pressure on cocoa prices [11] Group 5: Global Cocoa Deficit and Future Projections - The International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to 494,000 MT, the largest in over 60 years, with production down by 13.1% year-on-year [12] - ICCO forecasts a global cocoa surplus of 142,000 MT for 2024/25, marking the first surplus in four years, with production expected to rise by 7.8% year-on-year [12]

Cocoa Prices and Market Dynamics - Cocoa prices have increased for two consecutive days, with December ICE NY cocoa closing up by 0.80% and December ICE London cocoa up by 0.50%, driven by weather concerns in West Africa [1] - Tighter cocoa inventories are supporting prices, with ICE-monitored cocoa inventories in US ports falling to a four-month low of 2,099,630 bags [3] - The slowdown in cocoa exports from the Ivory Coast is bullish for cocoa prices, with shipments reported at 1.81 million metric tons (MMT) for the marketing year, a 5.8% increase from last year but down from a larger 35% increase seen in December [3] Supply and Quality Concerns - Quality issues regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with the average estimate for this year's mid-crop at 400,000 MT, down 9% from last year's 440,000 MT [7] - Optimism about this year's cocoa crop harvest in West Africa is present, with Mondelez reporting a cocoa pod count 7% above the five-year average [5] - Nigeria's cocoa production is projected to fall by 11% year-on-year to 305,000 MT for the 2025/26 crop year, which is supportive for cocoa prices [8] Demand Trends - Weakness in global cocoa demand has been a bearish factor, with Q2 European cocoa grindings down 7.2% year-on-year to 331,762 MT, and Q2 Asian cocoa grindings down 16.3% year-on-year to 176,644 MT, the smallest amount for a Q2 in eight years [9] - Higher cocoa production in Ghana is bearish for cocoa prices, with the Ghana Cocoa Board projecting an 8.3% year-on-year increase in the 2025/26 crop to 650,000 MT [10] Global Cocoa Market Outlook - The International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to 494,000 MT, the largest deficit in over 60 years, with production falling by 13.1% year-on-year to 4.380 MMT [11] - Looking ahead, ICCO forecasts a global cocoa surplus of 142,000 MT for 2024/25, marking the first surplus in four years, with production expected to rise by 7.8% year-on-year to 4.84 MMT [11]

Core Viewpoint - Cocoa prices have increased due to weather concerns in West Africa, impacting supply and quality, while global demand remains weak, creating a complex market environment [1][4][10]. Group 1: Price Movements - December ICE NY cocoa closed up +73 (+0.99%) and December ICE London cocoa closed up +68 (+1.33%) on Wednesday [1]. - Cocoa prices fell to 1.5-month lows on Tuesday due to expectations of growing supplies amid weakening demand [4]. Group 2: Supply Factors - Heavy rain in the Ivory Coast has hindered farmers' access to cocoa fields, reducing cocoa movement to ports [1]. - Tighter cocoa inventories in US ports fell to a 4-month low of 2,115,411 bags [3]. - The slowdown in cocoa exports from the Ivory Coast showed a shipment of 1.81 million metric tons (MMT) this marketing year, up +5.8% from last year but down from a larger +35% increase seen in December [7]. - Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with an average estimate of 400,000 metric tons, down -9% from last year's 440,000 metric tons [8]. Group 3: Crop Conditions - Optimism about this year's cocoa crop harvest in West Africa is noted, with a cocoa pod count reported to be 7% above the five-year average [5]. - The past 60 days for West Africa cocoa were the driest on record since 1979, impacting cocoa pod retention before the main crop harvest [6]. - Nigeria's cocoa production is projected to fall -11% year-on-year to 305,000 metric tons for the 2025/26 crop year [9]. Group 4: Demand Dynamics - Weakness in global cocoa demand has been a bearish factor, with Q2 European cocoa grindings falling -7.2% year-on-year to 331,762 metric tons [10]. - The Cocoa Association of Asia reported a -16.3% year-on-year decline in Q2 cocoa grindings to 176,644 metric tons, the smallest amount for a Q2 in 8 years [10]. - Higher cocoa production by Ghana is seen as bearish for cocoa prices, with a projected increase of +8.3% year-on-year to 650,000 metric tons for the 2025/26 crop [11]. Group 5: Global Cocoa Deficit - The International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 metric tons, the largest deficit in over 60 years [12]. - The 2023/24 global cocoa production is expected to fall by 13.1% year-on-year to 4.380 million metric tons [12].