Cocoa futures on ICE slipped on Wednesday, with September ICE New York cocoa down 0.17% and September ICE London cocoa down 0.16%, as traders weighed signs of improving supply from Ghana and rising warehouse stocks. The pullback came alongside a softer U.S. dollar, which has helped cushion losses in commodities.
Key takeaways
- Price move: September ICE New York cocoa fell 0.17%, while September ICE London cocoa dropped 0.16%.
- Catalyst: Ghana harvesting data pointed to larger 2025/26 output, while ICE inventories rose to a two-year high.
- Key implication: Near-term supply indicators are currently overpowering the market’s longer-run weather-driven support.
- Macro factor: A weaker dollar limited the depth of the decline, supporting commodities broadly.
What drove the move
Ghana remained the focal point for cocoa supply expectations. According to Ghana’s cocoa board, 750,000 metric tons of cocoa had been harvested for the 2025/26 season as of Wednesday, versus 597,000 metric tons during the same stage of 2024/25—an increase of 25.6%. With the 2025/26 season set to end at month-end, the data reinforced the view that inventories could build in the near term.
Supply pressure also came from storage levels. According to ICE data cited in the report, cocoa inventories climbed to 3,384,965 bags on Wednesday—described as the highest level in two years. Higher stocks typically weigh on futures prices by signaling sufficient availability for immediate deliveries.
Meanwhile, the U.S. dollar index slid to a seven-week low on Wednesday, which, according to the report, helped commodities generally. A softer dollar can reduce currency headwinds for dollar-priced agricultural futures, slowing any downside momentum in cocoa.
How earlier supply concerns are still influencing the curve
The market’s recent direction has reflected a tug-of-war between current supply strength and forward production risks. Earlier, cocoa prices rose to three-week highs on Wednesday after positive carryover from Friday, with traders also focusing on potential production constraints in Ghana.
According to the report, Ghana’s regulator COCOBOD projected that 2026/27 cocoa production could fall to a range of 450,000 to 550,000 metric tons, down from 750,000 metric tons projected for 2025/26. The estimate cited the combined effect of swollen shoot disease, aging farms, and the likelihood of adverse weather associated with El Niño.
Despite that longer-dated caution, the latest near-term indicators—harvest progress in Ghana and higher ICE stocks—appear to be dominating day-to-day pricing.
Demand signals mixed across regions
On the demand side, the report pointed to a mixed picture for cocoa grindings in the second quarter. According to the European Cocoa Association, Q2 European cocoa grindings fell 4.6% year over year to 316,366 metric tons, a decline larger than the 1.5% contraction expected and the weakest Q2 level in six years. That raised concerns among some traders about European intake.
However, other regional data provided support. The report said the National Confectioners Association reported Q2 North American cocoa grindings rose 7.7% year over year to 109,659 metric tons, against expectations for a 1% decline. In Asia, the Cocoa Association of Asia reported Q2 Asian cocoa grindings increased 25% year over year to 224,646 metric tons, well above expectations for a 9% rise.
The net effect for prices was unclear, but the mixed demand data appears to have left room for supply signals—especially from West Africa—to steer sentiment.
Weather, crop forecasts, and the surplus outlook
Several supply-balance forecasts have been gradually shifting toward tighter conditions for later seasons, helping provide some underlying support even as near-term prices soften. According to the report, StoneX cut its 2026/27 global cocoa surplus estimate to 25,000 metric tons from 149,000 metric tons forecast in April, citing El Niño-related risks to the West African crop.
Early crop assessments have also pointed to weaker fundamentals for the upcoming main harvest that begins in September. The report referenced early surveys of the 2026/27 Ivory Coast crop showing below-average cherelle formation, which typically indicates a weaker outlook. It also cited commentary from Expana saying pod counts have improved compared with early surveys, while still pointing to early estimates of around 1.8 million metric tons for the season starting in September—about 18% below roughly 2.2 million metric tons in 2025/26.
On surplus projections, Transgraph Consulting forecast in the report that the global cocoa surplus for 2026–2027 would shrink to 80,000 metric tons from 415,000 metric tons in 2025–2026, driven mainly by expected production declining to 4.87 million metric tons in 2026–2027 from 5.11 million metric tons in 2025–2026.
What to watch next
Traders are likely to keep monitoring Ghana harvest updates and ICE inventory trends for confirmation of whether near-term supply pressure persists. At the same time, market attention should remain on West African weather signals—particularly the El Niño outlook referenced by the U.S. Climate Prediction Center—and updates to Ivory Coast and broader West Africa crop surveys, which can quickly reshape expectations for the 2026/27 marketing balance.
