As of July 11, 2017, cocoa futures trading in the United States and London were lower than the levels a week ago. Cocoa futures traded in the United States are considered a benchmark for global cocoa prices. The ones traded in London are considered a benchmark for physical cocoa. Let’s look at cocoa price movements in more detail.
The current prices of near-month US traded futures expiring on July 14, 2017, fell 3.0% to $1,782 per metric ton, from an average of $1,836 per metric ton a week ago. Similarly, cocoa futures traded in London fell 4.0% to 1,452 pounds per metric ton from an average of 1,513 pounds per metric ton last week.
Year-over-year, cocoa prices at both locations were trading significantly lower. To put it in context, cocoa prices in the United States were trading 40.0% lower year-over-year, and near-month futures in London were trading 36.0% lower year-over-year.
The current forward curve for cocoa futures trading in the United States and London shifted lower compared to their respective previous week’s levels. US cocoa futures in the near month fell more steeply than the farther month futures week-over-week. However, the shift in the forward curve for cocoa traded in London was lower week-over-week.
In the earlier part of this series, we saw how falling sugar benefits confectionary producers (SGG) such as Mondelēz International (MDLZ), Hershey (HSY), Tootsie Roll Industries (TR), and Rocky Mountain Chocolate Factory (RMCF). These producers also use cocoa, and lower cocoa prices last week are very beneficial.
Next, we’ll look at orange juice futures.