Cocoa Futures Losing Flavor

Supply Recovery Meets Cooling Demand as Prices test key Support Levels

Date: 6-19-2025

From the Trading Desk at Stipelis Global Trading LLC

Cocoa Futures Losing Flavor

Supply Recovery Meets Cooling Demand as Prices Test Key Support Levels

Product: Cocoa

SizeTen Metric Tons
QuoteDollars per Ton
Multiplier10.00
Minimum Tick$10.00 (1 Point)

Contract Month: September

Current Price: 8749.00

Cocoa:

The global cocoa market is large, diverse, and expanding steadily, fueled by strong demand for chocolate and cocoa-based products—especially in emerging markets and among younger consumers. Cocoa beans, primarily used in chocolate production, also yield cocoa butter and powder, which are vital in both the food and cosmetic industries. Beyond food, cocoa by-products such as shells and husks serve a variety of industrial uses, from animal feed and fertilizers to natural dyes, activated carbon, and even biofuel development.

Valued between $14.4 and $15.5 billion in 2025, the market is projected to nearly double by 2035, reaching $29.1 billion. Growth is supported by rising interest in premium and ethically sourced chocolate, improved traceability, and sustainable farming practices. Technological innovation and stronger farmer engagement are enhancing supply chain efficiency, while new applications in cosmetics, pharmaceuticals, and beverages are driving further market diversification and economic impact.

Summary:  

Cocoa futures are firmly in correction mode. After last year’s explosive rally—fueled by a deep supply shock in West Africa—the market has come back to earth. Prices have dropped 24% year to date, now trading around 8759. A combination of improving crop conditions and a pullback in demand has triggered the selloff.

On the supply side, the worst appears over. Heavy rains, improved farming inputs, and new plantings in Brazil, Nigeria, and Indonesia are boosting production expectations. For the first time in four years, traders are now forecasting a potential global surplus for the 2024/25 crop year. West African production remains volatile, but the pressure has eased enough to temper bullish momentum.

Demand, meanwhile, has softened. With input costs high, major chocolate producers are scaling back usage. Consumers are reacting too—pulling back from premium-priced products in favor of more affordable options. That’s added to the downward pressure on futures prices.

Technically, the market looks fragile. Price is trading below several key averages—the 50-day, 200-day, and recent monthly and weekly pivot levels—signaling weakness. Momentum indicators show sellers in control, with the price action losing strength over consecutive sessions. Volatility has narrowed, and volume is slightly below its 20-day trend, reflecting hesitation among participants.

Support levels between 8677 and 8381 could offer a near-term base, but if those give way, a deeper correction is possible. On the upside, bulls would need a rally above 8888, then 9099, to regain control.

Despite this correction, the bigger picture remains supportive. Global cocoa demand is forecast to nearly double by 2035, thanks to rising consumption in Asia, the growth of ethical sourcing, and cocoa’s increasing use in cosmetics and industrial applications. Still, the market must first work through the current rebalancing phase.

In short, this is a cooling-off period after an overheated rally. The cocoa market may be setting the stage for longer-term accumulation, but in the short term, traders should stay cautious and watch for confirmation of a bottom.

The opinions expressed are those of Stipelis Global Trading LLC and are considered market commentary. They are not intended to act as investment recommendations. Individuals should make investment decisions based on their own analysis and with direct consultation with a financial advisor.

Stipelis Global Trading LLC is registered with the Commodity Futures Trading Commission and is a member of the National Futures Association. Member ID 0474441

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