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September ICE NY cocoa (CCU25) today is up +198 (+2.44%), and September ICE London cocoa #7 (CAU25) is up +125 (+2.34%).<\/p>\n
Cocoa prices today are sharply higher due to concerns about dry weather in West Africa. \u00a0According to the European Centre for Medium-Range Weather Forecasts, rainfall in the Ivory Coast and Ghana this season remains below the 30-year average, and combined with high temperatures, risks hurting cocoa pod development for the main crop harvest that starts in October.<\/p>\n
Cocoa prices posted 2-week highs Thursday on concerns that a slowdown in the pace of Ivory Coast cocoa exports will tighten global supplies. \u00a0Monday’s government data showed that Ivory Coast farmers shipped 1.74 MMT of cocoa to ports this marketing year from October 1 to July 20, up +6.1% from last year but down from the much larger +35% increase seen in December. <\/p>\n
A significant short position by commodity funds in London cocoa futures raises the potential for short covering. \u00a0Last Friday, ICE Futures Europe reported that funds boosted their net-short London cocoa positions by 1,010 to 6,361 short positions the week ended July 15, the most in more than two years.<\/p>\n
Concerns over tepid chocolate demand are bearish for cocoa prices. \u00a0On Tuesday, chocolate maker Lindt & Spruengli AG lowered its margin guidance for the year due to a larger-than-expected decline in first-half chocolate sales. \u00a0Also, chocolate maker Barry Callebaut AG reduced its sales volume guidance earlier this month for a second time in three months, citing persistently high cocoa prices. \u00a0The company projects a decline in full-year sales volume and reported a -9.5% drop in its sales volume for the March-May period, the largest quarterly decline in a decade.<\/p>\n
Cocoa prices sold off last week, with NY cocoa sinking to an 8-month nearest-futures low last Thursday and London cocoa slumping to a 17-month nearest-futures low. \u00a0 Weakness in global cocoa demand has hammered prices. \u00a0The European Cocoa Association reported last Thursday that Q2 European cocoa grindings fell by -7.2% y\/y to 331,762 MT, a bigger decline than expectations of -5% y\/y. \u00a0Also, the Cocoa Association of Asia reported that Q2 Asian cocoa grindings fell -16.3% y\/y to 176,644 MT, the smallest amount for a Q2 in 8 years. \u00a0North American Q2 cocoa grindings fell -2.8% y\/y to 101,865 MT, which was a smaller decline than the declines seen in Asia and Europe.<\/p>\n<\/p><\/div>\n