Cocoa tries to stabilize after autumn sell-off 📌

Cocoa futures try to stabilize on ICE today, which comes after a huge sell-off. Since the September 1, cocoa prices are down almost 35%. The big catalyst is politics, not whether this time — the Trump administration decided to drop its 10% reciprocal tariff on commodities the U.S. doesn’t produce, including cocoa. But cocoa from Brazil still faces a hefty 40% national-security tariff, limiting the bullish impact. Ivory Coast export data added a twist: shipments from October 1 to November 16 reached 516,787 MT, down nearly 6% from last year. That kind of slowdown normally supports prices, but broader supply expectations overshadowed it in the short-term.

Farm reports in West Africa remain surprisingly upbeat. Farmers in both Ivory Coast and Ghana describe healthy trees, rapid pod development, and ideal drying conditions. Mondelez even noted that pod counts are 7% above the five-year average. It is a strong signal for a larger main crop this season.

• Demand, however, is deeply disappointing.

  • Hershey reported a weak Halloween season, a blow, considering the holiday accounts for almost 18% of U.S. annual candy sales. But the stock didn't move down after it, which may signal that a lot of negative news are reflected (also in cocoa prices) right now.

  • Asian cocoa grindings plunged 17%, the lowest Q3 reading in nine years. European grindings fell 4.8%, hitting a ten-year Q3 low. North America showed a 3.2% rise, but analysts warn this was distorted by new reporting participants rather than real consumption strength. Retail chocolate sales confirm the demand slump, with North American chocolate volumes down more than 21% over the latest 13-week period.

Cocoa futures are under pressure from tariff adjustments, improving West African supply prospects, and the steepest set of global demand warnings in close to a decade. The market is caught between optimistic crop conditions and a troubling collapse  in consumption, but technicals signal that investors may start to accumulate at todays prices.

Source: xStation5