Several weeks of speculative fund liquidation has seen cocoa prices correct nearly $400 per MT lower over the past month. This move lower in futures, with prices down 15 percent, was accompanied by large speculative funds selling sold off nearly two-thirds of their long positions. Recent fundamentals have been generally supportive, with Q3 grind coming in on the stronger side of expectations and disappointing main-crop arrivals in Ivory Coast reported down 10 percent.

The main bearish fundamental has been higher bean stocks across licensed warehouses in the U.S. that have been setting record highs in recent months, exceeding both last year’s stocks and the five-year average by 50 to 55 percent. Suffice it to say, there are more than ample cocoa beans stateside to meet grind and other demand.

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NY cocoa & net managed money

Source: CFTC, DTN, McKeany-Flavell
Posted by: Information Services
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