EU cocoa futures rose 7% over the past week, closing at 3,153 GBP/t for the front-month July 2026 contract, while the most active September contract gained 8% and at one point on May 26th rallied more than 10% in a single session. ICE US cocoa prices followed, rising 7% to 4,169 USD/t for the front-month July contract. The moves came against a backdrop of limited new information — a dynamic Vesper describes as the Silly Season, when thin summer news flow and reduced liquidity allow funds to drive outsized price swings.

The reported catalyst was fund short-covering combined with industry buying. Funds have been steadily trimming their net short position, which now stands at -24,148 lots across both markets. The near-term supply picture is broadly supportive: Ivory Coast’s cocoa regulator issued an optimistic 2025/26 crop estimate of 2–2.1 million tonnes, above prior market expectations, while arrivals at Ivorian ports are running slightly ahead of last season’s pace. Ghanaian authorities placed their 2025/26 crop at 650,000 tonnes. Cocoa beans arrival data from Ivory Coast through May 17th confirmed volumes holding above last season’s levels.

Despite the near-term supply comfort, attention is beginning to shift to 2026/27. Lower levels of crop inputs across West Africa, combined with an anticipated El Niño event, are building risk into the forward picture. Vesper flags Ecuador as a particular vulnerability: the country’s output has become an important contributor to global supply in recent seasons, and a strong El Niño event could compromise yields there even given the partial weather resistance of the dominant planted hybrid. Current models place Ecuador’s 2026/27 output at over 600,000 tonnes, but that figure could disappoint.

On the product side, cocoa butter and cocoa mass prices gained nearly 24% month-on-month, while cocoa powder was flat week-on-week and around 13% softer versus last month. Ratios remain stable, and fresh demand signals have been absent.

For the full analysis of fund positioning, origin arrivals, and the 2026/27 El Niño supply outlook, read the complete Vesper report: https://app.vespertool.com/market-analysis/3030