Facts

• COCOA has halted its decline near 2-year lows, around $4,000 per tonne
• The US dollar is weakening across global markets; the USDIDX is trading near 4-year lows
• Cocoa producers in West Africa are holding back supply due to lower prices

Recommendation

Long position COCOA at market price

• Stop loss: 4000
• Take profit: 4850

رأي

Mixed signals from the cocoa market may favor a rebound after many months of steep declines, which in January even turned into a panic sell-off. At the moment, support comes from a weaker US dollar and the fact that West African producers are holding back supply at lower price levels.

Data from Ivory Coast (the world’s largest producer) showed that cocoa deliveries to ports between October 1, 2025 and January 25, 2026 totaled 1.20 million tonnes, down -3.2% y/y (vs 1.24 million tonnes in the same period a year earlier). Nigeria may also support prices: the country’s cocoa exports in November fell -7% y/y to 35,203 tonnes, and the Nigeria Cocoa Association’s forecast for the 2025/26 season points to an -11% y/y decline in production to 305,000 tonnes (from a projected 344,000 tonnes in 2024/25).

The market appears to have already priced in improving weather conditions in Africa, the rebound in ICE inventory levels, and weaker demand conditions. A technical rebound attempt seems possible from current levels, with the RSI below 30 signaling oversold conditions. We recommend opening a long position in COCOA at market price, with a stop loss at $4,000 per tonne and a take profit at $4,850 per tonne — both levels were identified using a price action approach.

Source: xStation5

Octalas AI

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