Cocoa Futures Rise to More Than 29-Month High

(Wall Street Journal) – Cocoa futures rose to a more than 29-month high Wednesday as dry weather in top growing region West Africa raised concerns over supplies of the key chocolate ingredient amid strong global demand.

Cocoa for delivery in March on ICE Futures U.S. was up 1.2% at $2,950 a ton. May-delivery cocoa was up 1.4% at $2,968 a ton.

Mostly dry weather is expected over the next five days in cocoa-growing regions, weather forecaster DTN said. The forecaster added that the dryness could increase stress on cocoa trees. That could crimp cocoa output from the source of more than two-thirds of the world’s cocoa supply.

“That completely turns cocoa into a weather market,” said Hector Galvan, a senior broker at RJO Futures. “You imagine less yield for the future with the consistent demand.”

Global cocoa supplies are expected to fall short of demand this season by about 70,000 metric tons, according to the International Cocoa Organization.

Prices could “test that magical $3,000 (a ton level) by the end of the week,” Mr. Galvan said.