Cocoa Futures Market News and Commentary
Mar ICE NY cocoa (CCH21) on Wednesday closed down -61 (-2.19%). ICE London cocoa #7 (CAH210) closed down -30 (-1.62%).
Cocoa prices on Wednesday closed lower on profit-taking. Cocoa prices have rallied sharply over the past week, with Mar NY and London cocoa posting contract highs Tuesday and nearest-futures (Dec 20) NY cocoa surging to a 4-1/4 year high. Cocoa prices soared on last week's news that Hershey, one of the top chocolate makers in the world, bought cocoa beans via ICE NY cocoa futures inventories instead of purchasing them directly in the physical market. Those purchases sent December NY cocoa futures to a record premium over the March contract. Hershey is buying the ICE inventories in an attempt to circumvent paying the living-income differential (LID) $400-a-ton premium Ivory Coast and Ghana added to their beans to boost farmer incomes. Hershey's maneuver may prompt other cocoa users to do the same, which could push cocoa futures prices even higher.<... Read more