Cocoa bean prices are still on the high side, hitting records each day. The supply continues to face challenges and does not seem to be salvageable any time soon. ICCO’s quarterly report states a change in supply and demand deficit from 74,000 MT to 374,000 MT. Cocoa butter prices are also on the rise, affecting the price of chocolate. 

In just a month, cocoa prices have almost doubled. There is a lot of hysterical buying from the trade contributing to the price hike in the area as well as speculators taking advantage of the situation. Clearly, speculators helped boost prices in the fourth quarter of last year, but recently they have been taking profits and liquidating portions of their positions to feverish buying coming from commercial end-users.

The Prospective Plantings report, released on Mar. 28, showed that USDA estimated soybean acreage to be the same as the average analyst expectation. As expected, acreage is projected to increase in the major soybean growing states. 

The Mar. 28 plantings and grain stocks reports indicated a tighter balance sheet for corn: Mar. 1 stocks were below expectations as use for ethanol and perhaps feed has been a bit higher than projected, and 2024 corn acreage is anticipated to be 90.0 million acres, down from 94.6 million last year. The news provided support for the corn market, with the May and December contracts each settling over 15 cents higher on Thursday.

In February, CPI and PPI inflation increased. Inflation can be attributed to the increase in food prices and energy. With the rise of inflation above FED targets, policy makers may lower fund rates, affecting investors. Agricultural commodities are seen to be of interest to interest, justifying why commodity index funds in the agricultural space have seen long positionings especially in corn, soybeans, and wheat. 

This report summarizes a small sampling of the information available on our IQ Ingredient Intelligence platform. Further insights, statistics, analysis, and pricing information for these commodities and others are available to IQ subscribers.

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Posted by: Information Services
Our Information Services team assists our clients with understanding commodity and ingredient market dynamics. Using our extensive database of intelligence, we also produce regular commodity and commercial market publications covering supply and demand fundamentals, news alerts on events that shape the markets, and resource guides to give you a complete picture of the industries we monitor.