March ICE NY cocoa (CCH26) today is down -178 (-2.93%).  March ICE London cocoa #7 (CAH26) is down -129 (-2.95%).

Cocoa prices are sharply lower today, posting 1-week lows.   Improved weather in West Africa is weighing on cocoa prices today.  Tropical General Investments Group said today that favorable growing conditions in West Africa are expected to boost the February-March cocoa harvest in the Ivory Coast and Ghana, as farmers report larger and healthier pods compared with the same period last year.

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Chocolate maker Mondelez recently said that the latest cocoa pod count in West Africa is 7% above the five-year average and "materially higher" than last year's crop.  Harvest of the Ivory Coast's main crop has begun, and farmers are optimistic about its quality.

On Monday, cocoa prices rose to 2-week highs as slower cocoa arrivals at ports in the Ivory Coast have fueled concerns about tighter supplies.  Farmers in the Ivory Coast delivered 59,708 MT of cocoa to ports during the week ended Dec 28, down -27% compared with the same week last year.  Also, cumulative data shows Ivory Coast farmers shipped 1.029 MMT of cocoa to ports this new marketing year (Oct 1 through Dec 28), down -2.0% from 1.050 MMT in the same period a year ago.  The Ivory Coast is the world's largest cocoa producer.

Cocoa prices have underlying support from expectations for index-related buying tied to the addition of cocoa futures to the Bloomberg Commodity Index (BCOM) starting in January.  According to Citigroup, the inclusion of cocoa in the BCOM may lure as much as $2 billion of buying of NY cocoa futures.

Cocoa prices also have support after ICE-monitored cocoa inventories held in US ports fell to a 9.5-month low of 1,626,105 bags last Friday.

Cocoa prices have support on a tightening global supply outlook.  On Nov 28, the International Cocoa Organization (ICCO) cut its global 2024/25 cocoa surplus estimate to 49,000 MT from a previous estimate of 142,000 MT.  It also lowered its global cocoa production estimate for 2024/25 to 4.69 MMT from 4.84 MMT previously.  In addition, Rabobank last Tuesday cut its 2025/26 global cocoa surplus estimate to 250,000 MT from a November forecast of 328,000 MT.