Been watching cocoa futures lately and the picture's pretty bearish right now. Prices have been getting hammered by a combination of oversupply and weak demand that's hard to ignore. Last week both NY and London cocoa closed lower, and honestly it feels like the pressure keeps building.

The supply situation is wild. We're looking at massive global cocoa surpluses forecasted for the next couple seasons, and ICE inventories just hit a 1.5-year high. Meanwhile, demand is just not there. Barry Callebaut reported a brutal -22% drop in cocoa division sales volume, and grinding numbers across Europe, Asia, and North America all came in soft. Consumers are basically rejecting chocolate prices at these levels.

There's some offsetting factors though. Ivory Coast shipments are down year-over-year, and Nigeria's production is expected to fall. But favorable West African weather could boost the upcoming harvest, so that's another headwind. If you're thinking about cocoa exposure through something like a cocoa ETF, you're probably looking at continued pressure unless demand suddenly picks up. The surplus narrative is just too strong right now to fight against.