Core Viewpoint - Cocoa prices are experiencing mixed trends due to varying supply and demand dynamics, influenced by weather conditions in West Africa and inventory levels in the U.S. [2][4] Supply Factors - Recent rain in West Africa has eased dry conditions, potentially boosting cocoa output, while NY cocoa prices rose as U.S. port inventories fell to a 4.5-month low of 2,048,998 bags [2] - The Ivory Coast's cocoa exports have slowed, with shipments at 1.82 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 [4] - Quality concerns regarding 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's 440,000 MT [8] - Nigeria's cocoa production is projected to decline by 11% year-on-year to 305,000 MT for the 2025/26 crop year, which may support cocoa prices [9] Demand Factors - Weak global cocoa demand is negatively impacting prices, with European cocoa grindings down 7.2% year-on-year and Asian grindings down 16.3% year-on-year, marking the smallest Q2 in eight years [10] - Chocolate maker Lindt & Sprüngli AG lowered its margin guidance due to a larger-than-expected decline in first-half chocolate sales, while Barry Callebaut AG also reduced its sales volume guidance, projecting a decline in full-year sales volume [5] Market Outlook - The International Cocoa Organization (ICCO) revised its 2023/24 global cocoa deficit to 494,000 MT, the largest in over 60 years, while forecasting a global surplus of 142,000 MT for 2024/25, marking the first surplus in four years [12] - Ghana's cocoa production is expected to increase by 8.3% year-on-year to 650,000 MT for the 2025/26 crop year, which may exert downward pressure on cocoa prices [11]

Cocoa Market Overview - Cocoa prices experienced a significant rally, with December ICE NY cocoa closing up 3.02% and London cocoa up 2.15%, reaching a 1.5-week high due to weather concerns in West Africa [1] - Heavy rainfall in the Ivory Coast has hindered farmers' access to cocoa fields, while dryness in Ghana and Nigeria has negatively impacted crop conditions [1][6] Supply and Inventory Dynamics - ICE-monitored cocoa inventories in US ports have decreased to a 4.25-month low of 2,092,823 bags, supporting higher cocoa prices [3] - Cocoa exports from the Ivory Coast have shown a slower pace, with shipments totaling 1.82 million metric tons (MMT) this marketing year, reflecting a 5.8% increase from last year but a decline from a previous 35% increase [3] Quality and Production Concerns - Quality issues regarding the Ivory Coast's mid-crop cocoa are contributing to price support, with an estimated mid-crop of 400,000 MT, down 9% from last year's 440,000 MT [7] - Nigeria's cocoa production is projected to decline by 11% year-on-year to 305,000 MT for the 2025/26 crop year, which may also support cocoa prices [8] Demand Trends - Weak global cocoa demand has been a bearish factor, with European cocoa grindings falling 7.2% year-on-year and Asian grindings down 16.3% year-on-year, marking the smallest Q2 amount in eight years [9] - In contrast, Ghana's cocoa production is expected to increase by 8.3% year-on-year to 650,000 MT, which could exert downward pressure on cocoa prices [10] Future Projections - The International Cocoa Organization (ICCO) has revised its global cocoa deficit for 2023/24 to 494,000 MT, the largest in over 60 years, while forecasting a surplus of 142,000 MT for 2024/25 [11]

Group 1: Cocoa Price Movements - Cocoa prices closed lower on Friday, with December ICE NY cocoa down 1.43% and December ICE London cocoa down 1.73% [1][2] - The decline in cocoa prices was influenced by a stronger dollar, leading to long liquidation in cocoa futures [2] - Cocoa prices had previously reached one-week highs due to weather concerns in West Africa, including heavy rain in the Ivory Coast and dryness in Ghana and Nigeria [2][4] Group 2: Supply and Demand Factors - Tighter cocoa inventories are supportive for prices, with ICE-monitored cocoa inventories in US ports falling to a 4.25-month low of 2,092,823 bags [4] - The Ivory Coast's cocoa exports showed a 5.8% increase year-on-year, but this was a slowdown compared to a previous 35% increase [4] - Weak global cocoa demand has negatively impacted prices, with significant declines in cocoa grindings reported in Europe, Asia, and North America [10] Group 3: Crop Conditions and Quality - Optimism about 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] - Quality concerns regarding the Ivory Coast's mid-crop cocoa are supportive of prices, with a projected decline of 9% in this year's mid-crop compared to last year [8] - Ghana's projected cocoa production for 2025/26 is expected to increase by 8.3%, which may exert bearish pressure on cocoa prices [11] Group 4: Global Cocoa Deficit and Future Projections - The International Cocoa Organization revised its 2023/24 global cocoa deficit to -494,000 MT, the largest deficit in over 60 years [12] - A forecasted global cocoa surplus of 142,000 MT for 2024/25 marks the first surplus in four years, with production expected to rise by 7.8% year-on-year [12]

Core Viewpoint - Cocoa prices are experiencing upward movement due to weather-related concerns in West Africa, impacting supply and inventory levels [1][3][4]. Group 1: Price Movements - December ICE NY cocoa prices increased by +1.16% to $87, while December ICE London cocoa prices rose by +0.29% to $15 [1]. - Cocoa prices fell to 1.5-month lows recently due to expectations of growing supplies amid weakening demand [4]. Group 2: Supply and Inventory Factors - Cocoa inventories monitored by ICE in US ports have decreased to a 4-month low of 2,115,411 bags [3]. - The Ivory Coast's cocoa exports for the current marketing year are at 1.81 million metric tons (MMT), reflecting a +5.8% increase from last year but a decrease from a previous +35% increase [3]. Group 3: Weather and Crop Conditions - Heavy rains in the Ivory Coast have hindered farmers' access to cocoa fields, while dryness in Ghana and Nigeria has negatively affected crop health [1][5]. - The latest cocoa pod count in West Africa is reported to be 7% above the five-year average, indicating a potentially larger crop than last year [5]. Group 4: Quality and Production Concerns - The quality of the Ivory Coast's mid-crop cocoa is reportedly poor due to late rains, with an estimated production of 400,000 MT, down -9% from last year's 440,000 MT [7]. - Nigeria's cocoa production is projected to decline by -11% year-on-year to 305,000 MT for the 2025/26 crop year [8]. Group 5: Demand Trends - Weak global cocoa demand has been a bearish factor, with European cocoa grindings down -7.2% year-on-year and Asian grindings down -16.3% year-on-year [9]. - Higher cocoa production in Ghana is expected to exert downward pressure on cocoa prices, with a projected increase of +8.3% year-on-year for the 2025/26 crop [10]. Group 6: 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 13.1% year-on-year [11]. - 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 [11].