In June, the International Cocoa Organization (ICCO) daily price averaged US$3,239 per tonne, up by US$143 compared to the average price recorded in the previous month (US$3,096), and ranged between US$3,107 and US$3,363 per tonne.
Cocoa futures prices experienced an uptick at the beginning of the month amid a continuation of the previous month’s bullish factors. Persisting concerns related to Ghana’s crop and the El Niño weather event affecting the upcoming cocoa season, were key elements behind this short-lived rise. In the subsequent trading sessions, cocoa futures prices moved with no particular firm direction, as the crop outlook in West Africa was quite mixed. Indeed, while in Côte d’Ivoire, rain was seen as problematic in some areas, the setback on Ghana’s crop was rather viewed as temporary by the Executive Director of the ICCO, pushing futures prices to move sideways.
However, from the latter part of the second week towards the end of the month, cocoa futures followed an upward trend, with quotations attaining a four-year high of £2,166 per tonne in London and a nine-month high of US$3,314 per tonne in New York. In addition to the bullish factors mentioned earlier, elements such as speculators’ increasing net long positions, indicating expectations for higher prices, against the backdrop of a weakening US dollar, also supported the markets.
The last trading session of the month witnessed profit-taking activities, as the market was due for correction after such a price surge experienced during the month.
The weakening dollar, following the downward revision of the American GDP forecast for 2015, provided some support to US$ denominated commodity markets. However, cocoa futures prices rose at a stronger pace than the broader commodity complex due to cocoa-specific bullish fundamentals. Read the full review, with charts, here.
