Today Markets Analysis: Cocoa futures moved higher on Wednesday as the market continues to trade within a broad sideways range, balancing rising inventories and stronger Ivory Coast production against concerns over Ghana’s 2026/27 crop, West African weather risks and cocoa quality.

December ICE NY cocoa closed at 5,924, up 56 points, or 0.95%, while December ICE London cocoa #7 gained 63 points to 4,378, up 1.46%.

London cocoa received additional support from a weaker British pound, which fell to a 1.5-month low. Because London cocoa is priced in sterling, a weaker pound can improve the relative attractiveness of the contract and contribute to buying interest.

The market remains caught between evidence of abundant current supply and growing concerns about the next West African crop.

Cocoa Futures Recover as London Market Gains Momentum

Both major cocoa contracts finished higher, although London cocoa outperformed New York.

Contract	Close	Change
Dec 2026 NY Cocoa	5,924	+56
Dec 2026 London Cocoa #7	4,378	+63

Cocoa remains within the broad trading range established between last Tuesday’s three-week low and the 11.5-month highs recorded around the end of August and beginning of September.

The market has therefore not yet established a clear directional breakout.

Bullish Sentiment

Several factors continue to provide potential support for cocoa prices:

• Ghana’s 2026/27 crop is expected to decline, with the country’s Cocoa Board estimating production could fall to 450,000–550,000 MT because of swollen shoot disease, aging farms and adverse weather risks.
• Ghana’s Cocoa Board separately estimates the 2026/27 crop at 650,000 MT, down 13% from 750,000 MT in 2025/26.
• Early assessments of the Ivory Coast crop indicate weaker pod development, with preliminary estimates suggesting production around 1.8 MMT, potentially 18% below approximately 2.2 MMT in 2025/26.
• West African cocoa quality is under pressure, with cloudy weather and limited sunshine encouraging the spread of black pod disease.
• El Niño represents a significant medium-term weather risk, with the potential to bring warmer and drier conditions to West Africa.
• StoneX has reduced its 2026/27 global cocoa surplus forecast to just 25,000 MT, from 149,000 MT previously.
• Transgraph Consulting expects the global surplus to shrink to 80,000 MT in 2026/27, compared with 415,000 MT in 2025/26.
• Ghana has proposed increasing cocoa farmer compensation by 6% for the 2026/27 season, which could encourage farmers to delay sales while seeking improved prices.
• North American cocoa grindings increased 7.7% year on year in Q2, exceeding expectations.
• Asian cocoa grindings rose 25% year on year, substantially above the expected 9% increase.

These factors suggest that although current supply is strong, the balance could become tighter if production problems develop across West Africa during the new season.

Bearish Sentiment

The market also faces significant downside considerations:

• Ivory Coast cocoa production has increased sharply, with the country’s cocoa regulator reporting 2.06 MMT harvested from June 2025 through June 2026, up 30% from 1.58 MMT previously.
• Ivory Coast cocoa shipments reached 2.14 MMT during the October 1, 2025–September 13, 2026 period, up 18% year on year.
• ICE cocoa inventories remain close to a two-year high, standing at 3,429,334 bags on Wednesday.
• Barry Callebaut has stated that the global cocoa market is well supplied, leaving it better positioned to absorb supply disruptions than during the 2023/24 El Niño period.
• Ghana’s current 2025/26 crop has been strong, with 750,000 MT harvested, up 25.6% from the previous season.
• European cocoa grindings declined 4.6% in Q2, reaching their lowest Q2 level in six years.
• Higher current production and elevated inventories could continue limiting upside if demand fails to accelerate.

The central bearish argument is that the market currently has more physical cocoa available than it did during the extreme supply shortages of 2023/24.

Ivory Coast Supply Creates a Major Market Counterweight

Ivory Coast remains the most important supply variable for cocoa traders.

The country’s cocoa regulator reported that 2.06 MMT was harvested between June 2025 and June 2026, representing a 30% increase year on year.

Bloomberg data also showed cumulative shipments of 2.14 MMT, up 18% from the corresponding period a year earlier.

However, there is an important timing distinction.

Ivory Coast has moved its domestic marketing year forward to begin on September 1, whereas the international cocoa marketing year traditionally begins October 1.

Reuters reported that deliveries under the new Ivory Coast marketing year amounted to 26,000 tonnes during September 1–13, down 45.8% from the comparable period of the previous season.

This means traders need to distinguish between the different marketing-year definitions when interpreting shipment statistics.

The large overall harvest and shipment figures remain bearish for current availability, while the lower early-season delivery figure could become more relevant if it signals weaker supply entering the new crop cycle.

Ghana Crop Risks Are Increasing

Ghana represents another important supply-side concern.

The country’s Cocoa Board has warned that the 2026/27 crop could fall substantially because of swollen shoot disease, aging cocoa farms and potential adverse weather.

One projection places production at 450,000–550,000 MT, while a separate field survey estimated approximately 650,000 MT.

Both estimates would represent a decline from the 750,000 MT produced in 2025/26.

The contrast between the strong current crop and potentially weaker next crop is important.

Ghana harvested 750,000 MT during 2025/26, up 25.6% year on year, meaning the current supply environment is considerably healthier than the forecasts for the upcoming season.

Traders are therefore increasingly focused on whether the anticipated decline is temporary or becomes part of a broader structural reduction in West African production.

Cocoa Inventories Remain a Bearish Signal

ICE cocoa inventories reached 3,436,742 bags on September 4, the highest level in two years.

Stocks stood at 3,429,334 bags on Wednesday, remaining close to that recent high.

Elevated exchange inventories provide an important counterweight to the bullish crop-risk narrative.

Higher stocks indicate that physical cocoa is available to the market, reducing the immediate scarcity premium that helped drive cocoa prices dramatically higher during the previous supply crisis.

If inventories continue increasing, it could reinforce the argument that current supply is sufficient.

If stocks begin declining rapidly, however, traders could place greater emphasis on the potentially weaker 2026/27 West African crop.

Weather Risk Remains a Major Wildcard

Weather could ultimately determine which side of the supply debate becomes more important.

The US Climate Prediction Center has warned that the current El Niño pattern could become one of the strongest in more than 75 years.

El Niño can produce warmer and drier conditions across parts of West Africa, potentially reducing soil moisture and placing additional stress on cocoa trees.

This is particularly relevant because early crop assessments are already reporting poor pod development in Ivory Coast.

However, weather risk should be viewed as a potential supply threat rather than a confirmed production loss.

The extent of the impact will depend on rainfall patterns, disease development and conditions throughout the growing season.

Cocoa Quality Adds Another Layer of Uncertainty

Cocoa prices have also received support from concerns about bean quality.

Cloudy conditions and limited sunshine across Ivory Coast and Ghana have contributed to the spread of black pod disease, which can reduce cocoa bean quality.

This creates a different type of supply risk.

Even if total production remains relatively high, lower-quality beans can reduce the quantity of cocoa suitable for particular processing and chocolate-production requirements.

The market will therefore be watching both crop volume and crop quality as the new season develops.

Global Cocoa Demand Sends Mixed Signals

Demand indicators remain inconsistent across major processing regions.

The European Cocoa Association reported that Q2 European grindings fell 4.6% to 316,366 MT, the lowest Q2 level in six years.

That decline was larger than the expected 1.5% fall and provides evidence of continued pressure in the European processing market.

North America presented a very different picture.

The National Confectioners Association reported that Q2 North American grindings increased 7.7% year on year to 109,659 MT, substantially exceeding expectations for a 1% decline.

Asian demand was even stronger, with the Cocoa Association of Asia reporting Q2 grindings up 25% to 224,646 MT, compared with expectations for 9% growth.

The regional divergence is therefore significant.

Weak European processing demand is bearish, while strong North American and Asian grindings indicate that global cocoa consumption has not weakened uniformly.

Global Surplus Forecasts Are Narrowing

The global balance is becoming another major focus.

StoneX has reduced its 2026/27 surplus forecast to 25,000 MT, down from 149,000 MT in April.

Transgraph Consulting expects the surplus to decline to approximately 80,000 MT, compared with 415,000 MT during 2025/26.

A smaller surplus means that the market would have less room to absorb a production shortfall.

This is particularly important given the concentration of global cocoa production in West Africa.

If Ghanaian or Ivory Coast production falls materially while demand remains firm, a relatively small projected surplus could quickly disappear.

What Traders Are Watching Next

The next phase of the cocoa market is likely to revolve around several competing forces:

1. Ivory Coast production — particularly early pod development and new-season arrivals.
2. Ghana’s 2026/27 crop — and whether production falls toward the lower forecasts.
3. ICE cocoa inventories — whether stocks remain near two-year highs or begin declining.
4. West African weather — particularly rainfall, sunshine and El Niño developments.
5. Black pod disease — and its effect on cocoa quality.
6. Global grindings — particularly whether strong Asian and North American demand offsets weaker European processing.
7. Global surplus forecasts — and whether the projected surplus continues shrinking.
8. The British pound — given its influence on London cocoa prices.
9. Ghanaian farmer pricing — and whether higher proposed compensation changes farmer selling behaviour.

A continued rise in inventories combined with strong Ivory Coast arrivals would keep the market focused on abundant current supply.

Conversely, declining arrivals, weaker Ghanaian production and worsening weather conditions could shift attention toward the emerging 2026/27 supply risks.

Currency Hedger View

Currency movements are particularly relevant to London cocoa because the contract is priced in sterling.

The British pound fell to a 1.5-month low on Wednesday, helping accelerate gains in London cocoa.

For international cocoa traders, processors and manufacturers, currency movements can therefore change the effective cost of physical purchases even when the underlying commodity price remains relatively stable.

Companies purchasing cocoa in USD or GBP while generating revenues in another currency may face additional exposure when commodity prices and exchange rates move simultaneously.

Currency Hedger provides specialist foreign-exchange and currency-risk analysis for businesses managing international payments and currency exposure.

Market analysis contributed by Currency Hedger, an Octalas Group division specialising in foreign exchange, currency risk and hedging.

Today Markets View

Cocoa remains caught between strong current supply and increasingly important risks surrounding the next West African crop.

The large Ivory Coast harvest, elevated ICE inventories and Barry Callebaut’s assessment that the market is well supplied provide substantial bearish arguments.

However, the outlook for Ghana and the next Ivory Coast crop is less comfortable, while El Niño, black pod disease and poor pod development could tighten availability if weather conditions deteriorate.

Demand is also sending mixed signals, with European grindings weakening while North American and Asian processing activity has strengthened considerably.

“Cocoa is increasingly becoming a market of two timeframes: current inventories and Ivory Coast supply remain substantial, while the outlook for the next West African crop is becoming less certain. Traders will need to watch new-crop arrivals and weather conditions closely to determine whether today’s ample supply can persist.”

— Louis Roche, Analyst, Today Markets

Bottom Line

Cocoa futures are rising, but the market remains fundamentally divided.

Strong Ivory Coast production and near-record exchange inventories are keeping a lid on immediate supply concerns, while weaker European demand adds another bearish factor.

At the same time, Ghana’s declining crop outlook, weaker early Ivory Coast crop assessments, black pod disease and potential El Niño disruption are creating growing medium-term supply risks.

The key signals to watch are West African arrivals, ICE inventories, Ghanaian and Ivory Coast production forecasts, weather conditions, cocoa quality and global grindings.

Analysis by Louis Roche, Analyst, Today Markets

Market analysis contributed by Currency Hedger, an Octalas Group division specialising in foreign exchange, currency risk and hedging.