With only two weeks before the end of the 2022/23 crop year, speculative funds specializing in commodities continue to add to long positions in cocoa. CFTC’s latest Commitment of Traders report showed that funds added 3,500 longs (futures only) to bring their net length to around 90,000 lots, the largest in the past ten years and some 31 percent of all open longs.
Meanwhile, commercial end users pared back positions by some 4,000 longs, showing the transition of ownership from commercial to specs. Looking at the current speculative ownership including options, the net holdings would drop down to about 88,000 longs. Adding index funds, however, the total position would be back up to nearly 94,000 net longs as a category.
Since mid-June, funds have added about 20,000 longs, their largest cocoa position since 2014. Cocoa futures have been moving higher since early summer, reinforced by the influx of speculative money. Specs started 2023 holding 10 percent of open longs, doubled to around 20 percent by early summer, and are now holding about one-third of all contracts as summer ends and fall begins.
The full version of this commentary appeared on our IQ platform Sep. 13, 2023. Further information, statistics, and pricing for the cocoa market are available to IQ subscribers. Learn more about becoming a subscriber.
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