Just noticed cocoa prices today were all over the place on Tuesday. NY cocoa dropped 0.20% while London cocoa jumped over 1% - pretty wild divergence. Turns out it's all about currency swings. The dollar hit a 3.25-month high which tanked NY contracts, but the pound weakening boosted London prices. Interesting how the same commodity moves so differently depending on which exchange you're watching.

But here's what's really weighing on cocoa prices today: massive oversupply. The ICCO just raised their 2024/25 surplus forecast to 75,000 MT - first surplus in four years. Global production is climbing 8.4% while demand is actually falling. Chocolate makers are getting crushed by high cocoa prices, so they're cutting orders. European grindings dropped 8.3% last quarter, the worst in 12 years. ICE inventories just hit a 6.5-month high too.

West Africa's having great harvests, Nigeria's exporting way more, and both Ivory Coast and Ghana just slashed farmer prices by 30-35%. Even with shipping cost concerns helping prices, cocoa prices today still reflect a market drowning in supply. The downtrend has been going for seven weeks straight.