Cocoa futures in New York fell to their lowest level in a month on rising warehouse stockpiles, outweighing weather concerns in key producing regions. The most-active contract dropped up to 4.8%, sliding to the lowest point since October 1st. Inventories have continued to build in exchange-monitored warehouses following last season's large surplus, signaling ample near-term supplies. Despite the bearish pressure from stockpiles, the market remains attentive to weather conditions in West Africa. Soil moisture remains adequate in top grower Ivory Coast despite slightly warmer-than-normal temperatures in the north. However, conditions are less favorable in neighboring Ghana and Nigeria, where hotter and drier weather threatens crop prospects.
According to Donald Keeney, senior agricultural meteorologist at Vaisala Xweather, the divergent weather patterns across the region add complexity to the supply outlook. Traders are balancing the immediate impact of rising inventories against potential weather-related risks to future harvests.
Source: Bloomberg Markets · Summarized by HeadlinesBriefing