First off, putting on my academic hat, a quasi-periodic reminder. As Dylan Grice, then at Société Générale pointed out, commodities' expected long-term real rate of return is not appealing. Here's our introduction to 2010's Société Générale's Dylan Grice-"Commodities: ‘Their Expected Long-Run Real Return is 0%’" (please ignore the supercilious "Well duh", I was in my haughty Valley Girl phase, better now):....
From Barchart, the headline story, October 3:
December ICE NY cocoa (CCZ25) on Friday closed down -291 (-4.49%), and December ICE London cocoa #7 (CAZ25) closed down -225 (-4.99%).
Cocoa prices extended their plunge this week on Friday, with NY cocoa posting a 19-month low in its nearest futures and London cocoa reaching a 20-month low. Cocoa prices are selling off as this week's actions by the governments of the Ivory Coast and Ghana to boost the amount they pay farmers for their cocoa beans may encourage sales and boost cocoa supplies.
The outlook for abundant global cocoa supplies is hammering cocoa prices. Cocoa deliveries in Ghana, the world's second-largest cocoa producer, have surged and are weighing on prices. Cocoa arrivals to ports in Ghana in the four weeks ending September 4 reached 50,440 MT compared to about 11,000 MT delivered in the same period in 2024.
Cocoa prices have also been under pressure over the past seven weeks amid fears that high cocoa prices and tariffs could dampen chocolate demand. Chocolate maker Lindt & Sprüngli AG lowered its margin guidance for the year in July due to a larger-than-expected decline in first-half chocolate sales. Additionally, chocolate maker Barry Callebaut AG reduced its sales volume guidance for a second time in three months in July, citing persistently high cocoa prices. The company projects a decline in full-year sales volume and reported a -9.5% drop in its sales volume for the March-May period, the biggest quarterly decline in a decade.
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. The harvest of the Ivory Coast's main crop is expected to begin next month, and farmers are optimistic about the quality of the crop.....
....MUCH MORE
Finally, On the Trail of Cocoa: The Dark Goddess, April 3, 2021:
Readers who have been with us for a while have seen us quote one of the more evocative sentences you are likely to find on markets:
“…For, after all, I had been into cocoa a bit myself. That was back when The Great Winfield had discovered cocoa trading. Occasionally in those more leisured days I would sit with him lazily watching stocks move, like two sheriffs in a rowboat watching catfish in the Tennessee River….”
—'Adam Smith', Supermoney
Here's part of the chapter it comes from.
Via the Twitter feed of Anne-Elisabeth Moutet:
So: the funniest pages ever written on commodities investing, by the great "Adam Smith", in 1968: "The Cocoa Game", from "The Money Game". 1/2
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There's more, all great, but that should help to sate the cravings until the chocolate Easter bunnies arrive.
If interested here are the two tweets that Anne-Elisabeth posted:
1/2 https://twitter.com/moutet/status/962695914833022977
2/2 https://twitter.com/moutet/status/962696246023553025
Possibly also of interest:
