Been watching cocoa futures pretty closely lately and noticed something interesting. Earlier this year we saw NY cocoa jump about 41 points while London cocoa was up even more at 76 points. The move came after reports showed smaller cocoa shipments hitting Ivory Coast ports - down roughly 5% compared to the same period the year before. That sparked some short covering in the market.

But here's the thing that's been keeping pressure on cocoa overall: global supplies are still pretty abundant and demand has been weak. Chocolate makers have been pulling back hard on purchases because consumers are balking at high prices. Barry Callebaut, the massive bulk chocolate producer, reported a 22% drop in their cocoa division sales volume. The grinding data also tells the story - European cocoa grindings fell 8.3%, which was way worse than expected. Even Asian and North American grindings have been sluggish.

On the supply side, there's mixed signals. West Africa's got favorable growing conditions which is bearish, but Nigeria's cocoa production is actually tightening up. Nigeria's exports dropped 7% and they're projecting an 11% decline in production for the season. The surplus forecasts have also been getting cut repeatedly - Rabobank slashed their estimate down to 250,000 MT from 328,000 MT just a few months back.

So cocoa's caught between abundance on one side and demand destruction on the other. The price bounce we saw was real, but with inventories rebounding and consumption staying weak, I'm not seeing a strong bullish case yet. Watching how the new West African harvest plays out will probably be key.