(Bloomberg) -- Cocoa futures in New York erased earlier gains Monday as traders monitor Ivory Coast bean deliveries for clues on this season’s supply outlook.
The most-active contract reversed course after earlier climbing as much as 5.7% on concerns that smaller supplies from top grower Ivory Coast will further squeeze an already tight market.
Thin trading is helping to send futures to wild intraday price swings, with a measure of 60-day volatility near the highest since October. Aggregate open interest — or the number of outstanding contracts — has significantly decreased while prices rallied to record highs in 2024.
Bean arrivals at Ivorian ports are still ahead of last year — when adverse weather hurt harvests — but they have slowed down compared to previous weeks. That has coincided with fresh worries about West African supplies as the seasonal dry Harmattan weather intensifies. That poses a risk for what’s left of the region’s main crop and the upcoming smaller mid-crop harvest.
Recent analysis indicates that “the improvement in port arrivals has tailed off,” Sholom Sanik, an analyst at Friedberg Mercantile Group Ltd., said in a note. The Harmattan winds sweeping across the region are already stressing crops and “depending on their intensity, that too poses a risk for the remainder of the main crop.”
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