Cocoa Futures at Over 1-Month Low

Cocoa futures traded around $3,700 per tonne, the lowest level since early May, amid rising inventories and positive supply prospects for the current season. Latest data showed ICE cocoa stocks rising to a 1.75-year high of 2,929,074 bags. Also, dealers pointed to strong arrivals in Ivory Coast during the current 2025/26 season and a broadly favorable outlook for the remainder of the mid-crop, supported by above-average rainfall across key producing regions, which improved soil moisture and tree development. However, the outlook for 2026/27 is less favorable, with early surveys pointing to smaller crops in both Ivory Coast and Ghana. The El Niño phenomenon remains a key risk, as it can bring heat and drought to West Africa and has been linked to major production declines in 2016 and 2024.

Cocoa futures have been trading around $4,000 per tonne since mid-May, as the market weighed lingering weather-related risks against improving supply prospects. Market participants remain focused on the possible impacts of the El Niño phenomenon, as it could hurt cocoa crops in Ivory Coast and Ghana, which produce more than 60% of the world's cocoa. On the other hand, prospects for a recovery in African cocoa production in 2025/26 are limiting further price gains. Farmers in Ivory Coast reported rainfall was mainly below average last week in most of the country's cocoa growing regions but it was sufficient to boost the size and quality of the March-to-August mid-crop. At the same time, there were signs of increased global inventories. Latest data showed ICE cocoa inventories rose further to a near two-year high of 2,846,957 bags by May 29.

Cocoa decreased 5.03% to 3892.97 USD/T