Cocoa crisis phase passes: CC rally loses momentum

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Cocoa gains 1.13% today to $5,751

Highlights

Barry Callebaut states the worst phase of the cocoa market crisis has passed, with improving supply conditions supporting a stronger outlook.
Risks and challenges persist in the Asia-Pacific cocoa industry, causing continued caution among market participants.
Spot cocoa trades with short-term bullish momentum and a firm intraday tone, expected to stay within $5,656 to $5,845 for the next 2 to 3 sessions.

Industry optimism rises as global supply risks persist in Asia-Pacific

Barry Callebaut, one of the world's leading cocoa producers, has stated that the worst phase of the cocoa market crisis appears to have passed, according to Foodnavigator. This acknowledgement signals improved stability in global supply conditions and supports a more constructive market outlook. However, the company also points to continuing risks and significant challenges for the cocoa industry in the Asia-Pacific region, keeping some caution present among participants.

Mixed momentum signals as price straddles technical boundaries

Technically, spot cocoa is holding above the MA-20 but just below the MA-50, while staying well above the MA-200. Immediate intraday support is marked by the Ichimoku Kijun at $5,726. Momentum signals remain mixed: RSI stands at 55.15 (Buy), but MACD is on a Strong Sell reading and ADX is Neutral. Stoch RSI, CCI, and Bull/Bear Power are all in overbought territory, and Bull/Bear Power highlights strong buyer dominance on the intraday move. However, the divergence between supportive RSI and Bull/Bear Power readings versus the bearish MACD suggests that the price advance may be losing momentum, and caution is warranted.

Sideways price action expected amid breakout volatility risk

In the short term, the expected trading range for cocoa is $5,656 to $5,845, with a 67% probability assigned to a move higher. The most likely scenario is sideways action within this volatility band relative to current levels. A break above $5,845 could trigger additional gains, while a close below $5,656 would expose the market to further near-term selling.

Viktoras Karapetjanc, expert at Traders Union, notes that Barry Callebaut’s outlook has greatly improved sentiment in the cocoa market. He believes easing supply pressures globally and strong buyer activity support a constructive stance, despite lingering APAC challenges. The analyst sees a higher probability of continued gains above $5,751, as fundamentals and sentiment align. "With supply risks receding and technical support holding, cocoa could break out if momentum strengthens from here."

Earlier, analysts noted that cocoa markets were driven by acute supply disruptions stemming from the Ivorian farmer strike, with near-term price direction hinging on the resolution of these industrial actions. The latest developments—highlighting improved supply stability alongside lingering regional risks—shift the focus to whether cocoa can decisively break above the $5,845 technical level, which would indicate renewed upside momentum in the coming sessions.

Source of Data: CC Price Analysis by TU

The analysis is based on a proprietary model combining technical, on-chain, and expert data. Not investment advice. See methodology

The information is based on forecasts and does not constitute investment advice or a guarantee of future results. Market conditions may change. See our Disclaimer and Editorial Integrity for details.