Been watching cocoa futures closely and Friday's move was interesting - NY cocoa jumped over 3.7% while London cocoa popped 6.25%. The dollar weakness definitely sparked some short covering since cocoa had gotten pretty beaten down all week. Prices had hit 2.75-year lows on Thursday so some technical bounce was overdue.

But here's the thing - the bigger picture for cocoa is still pretty grim. Global supplies are massive right now. Ivory Coast and Ghana farmers aren't selling at official prices because they're way above world prices, so inventory just keeps building. ICE cocoa stocks hit 5.25-month highs this week. Both countries are cutting their official farm prices hard (Ghana already cut 30%, Ivory Coast considering 35%) for the upcoming seasons, which tells you everything about the supply situation.

Demand is also weak. Barry Callebaut reported cocoa sales volume down 22% last quarter. European cocoa grinding fell 8.3% year-over-year - the worst Q4 in 12 years. Asian grinding also down 4.8% y/y. Consumers are basically refusing to pay chocolate prices, which is crushing demand for cocoa beans.

On the supply side, West Africa's having great growing conditions. Farmers are reporting bigger, healthier pods than last year. Nigeria's cocoa exports jumped 17% year-over-year last month. The only real support I'm seeing is that Ivory Coast shipments to ports are running 3% below last year's pace, and Nigeria's projected output could fall 11% next season.

So yeah, Friday's bounce was nice but cocoa's facing structural headwinds - surplus production, weak chocolate demand, and favorable harvests coming. The fundamentals just aren't there for a sustained rally in cocoa right now.