EU cocoa front-month May 2026 futures closed up 34% on the week at 3,551 GBP/t, with gains spread across the curve rather than concentrated in the front. The most-active July 2026 contract added 30% to 3,484 GBP/t. EU cocoa pushed above its key moving average indicators for the first time in over 12 months, the first technically bullish signal in months.
Origin markets followed in step. Ivory Coast bean prices were up 23% on the week, Nigeria 24%, Ghana 21%, and Ecuador 17%. Cocoa mass and cocoa butter both gained around 28% in Europe over the week, while cocoa powder was effectively flat, sidestepping the rally entirely.
What’s driving the move
The trigger was short-covering. Funds came into the week with a combined -36,916 net short position across both markets per the latest commitments data, and recent price action likely shows that short cover has now accelerated. Commercials moved the other way, lifting their combined short to -46,298 lots, now larger than the spec short.
Underneath the positioning shift, fundamentals have started to turn. Rainfall has dropped below normal across West African growing regions during a critical window for mid-crop development, raising concerns about bean size and quality. Ivory Coast arrivals are running marginally ahead of last season’s pace, but that near-term comfort sits against deepening worries for the 2026/27 main crop.
Ghana’s funding crunch and 2026/27 risk
Ghana plans to fund 2026/27 cocoa purchases through a $1 billion cedi-denominated domestic bond issuance, pending parliamentary approval. The proposal lands while state-owned buyer Producer Buying Company (PBC) reportedly owes farmers payments on 9,000 bags of delivered cocoa, faces asset seizures, and lacks funding to resume buying. Farmers continue to report payment delays that limit their ability to buy inputs ahead of the main-crop season starting in August.
Elevated fuel and fertilizer costs tied to the Strait of Hormuz disruption are compounding the input squeeze. El Niño risk for Q4 adds another layer of uncertainty.
Where this goes next
The near-term cap is still the 2025/26 surplus. The question is whether 2026/27 supply risk is enough to extend the move, or whether the rally fades once short-covering exhausts itself. Positioning has not flipped net long, suggesting the market has shifted in tone but is not yet in conviction-led bull mode. Holding these levels will require ongoing fundamental support.
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