Just caught something interesting in the cocoa market today. May contracts are up pretty solid - NY cocoa jumped 5.73% and London up 4.76%. Prices hit 1.5-week highs on supply concerns tied to the Iran situation and potential Strait of Hormuz disruptions. Shipping costs spiking, which could crunch cocoa exports.

But here's the thing - the underlying demand picture is still pretty weak. Earlier this week the ICCO bumped their global cocoa surplus forecast to 75,000 MT for 2024/25, first surplus in four years. Cocoa grindings across Europe, Asia, and North America have all disappointed. Barry Callebaut reported a -22% volume decline in their cocoa division, and consumers are clearly backing away from chocolate at these price levels.

West Africa's got favorable growing conditions too, which isn't helping. Ghana and Ivory Coast both cut farmer payouts significantly - Ghana by 30%, Ivory Coast by 57% starting March. Those two regions produce over half the world's cocoa supply.

So yeah, we're seeing some short covering on geopolitical jitters, but the structural story for cocoa still looks bearish with oversupply and soft demand. Interesting tension playing out.