The precious value of the cocoa bean has long been known. It has even been used as a form of currency in Central and South America before the Spanish conquest. Just as it was a royal luxury in Renaissance Spain, cocoa today is predominantly enjoyed by the wealthier economies such as the U.S., Netherlands, and Germany. Today, it is recognized that cocoa futures represent the benchmark for the world cocoa market.
|Cocoa Contract Specifications|
|Contract Size||10 metric tons|
|Price Quotation||Dollars per metric tons|
|Contract Months||March, May, July, September, December|
|Minimum Fluctuation||$1.00/metric ton, equivalent to $10.00 per contract.|
|Settlement Procedure||Physical Delivery|
|Daily Price Limit||none|
|Delivery Growths||The growth of any country or clime, including new or yet unknown growths. Growths are divided into three classifications. Group A-Deliverable at a premium of $160/ton (including main crops of Ghana, Lome, Nigeria, Ivory Coast and Sierra Leone). Group B-Deliverable at a premium of $80/ton (includes Bahia, Arriba, Venezuela,Sanchez among others). Group C-Deliverable at par (includes Haiti, Malaysia and all others).|
|Delivery Points||At licensed warehouses in the Port of New York District, Delaware River Port District, Port of Hampton Roads, Port of Albany or Port of Baltimore.|
|First Day Notice||Ten business days prior to first business day of delivery month.|
|Last Trading Day||One business day prior to last notice day.|
|Last Notice Day||Ten business days prior to last business day of delivery month.|
Cocoa is a powder derived from the fruit seeds of the cacao tree. It was referred as “the fruit of the gods” when it was first discovered in South America and was used as both a currency and a base of a drink. Historical evidence tells us that cocoa has been consumed for thousands of years. Today, about 3 million metric tons of cocoa are produced each year. The largest user of cocoa is the chocolate industry, but cocoa is also used in many non-food products including makeup and soap.
Cocoa is produced in warm climates like rainforests, near the equator. There are four major West African cocoa producers: the Ivory Coast, Ghana, Nigeria and Cameroon. These nations account for two-thirds of the world’s cocoa production. Other producers include: Indonesia, Brazil, Malaysia, Ecuador, and the Dominican Republic. Cocoa begins as a seed that eventually germinates and produces a plant. The plant can be grown in many soil types. Cocoa trees usually take 3-5 years to mature and can live for up to 50 years. When cocoa beans are produced, it takes about 6 months for them to ripen.
Last updated May 2013
Cocoa News Articles
- Cocoa futures advance as pound rises against greenback (12/2/2013) - Cocoa futures tracked the English pound's gains against the U.S. dollar on Monday, propelled higher by as much as 2 percent after the release of strong economic data, according to Bloomberg.
- Cocoa futures dip to lowest value in one week (11/11/2013) - Speculation about investors holding record bullish bets beginning to sell futures prompted cocoa futures to drop to their lowest value in seven days on Monday, according to Bloomberg.
- Cocoa futures dip amid strong supplies and falling demand (11/1/2013) - Reduced demand and strong supplies prompted cocoa futures to lose value on Friday, according to Bloomberg.
- Cocoa futures advance amid concerns about supplies (10/8/2013) - Prospects of supplies not meeting demand this season pushed cocoa toward its top price in nearly two years on Tuesday, according to Bloomberg.
- No stimulus tapering benefits soft commodities (9/19/2013) - Soft commodities were on the rise on Thursday in the aftermath of the U.S. Federal Reserve opting to leave economy-spurring stimulus measures intact, according to Bloomberg.
- Cocoa futures edge down (9/17/2013) - Cocoa futures slipped on Tuesday, dropping from their highest value in about 12 months, according to Bloomberg.
- Soft commodities drop after Fed chief commentary (6/20/2013) - Soft commodities were slumping on Thursday in the aftermath of the chairman of the U.S. Federal Reserve noting the body is aiming to cease economy-spurring stimulus measures by the end of the year, according to Bloomberg.
- Sugar futures edge higher (6/17/2013) - Sugar futures on Monday advanced amid bearish bets and the globe's leading generator of the soft commodity pushing more sugar cane toward the production of ethanol, according to Bloomberg.
- Coffee futures continue downward dive (6/13/2013) - Coffee futures on Thursday marked a fifth consecutive trading session of losses, tugged down by dryer weather helping to fortify the harvest of the soft commodity in Indonesia while rain strengthens the development of crops, according to Bloomberg.
- Coffee futures drop as rain slows in Indonesia (6/12/2013) - Coffee futures on Wednesday were slipping as one of the soft commodity's main growing region is set to see rain slow down, according to Bloomberg.
Cocoa Blog Posts
- Technically Speaking: Markets You Should Be Watching Right Now! (9/11/2013) - This is a sample entry from Brian Cullen’s email newsletter, The Cullen Outlook, published on September 11, 2013. December COCOA SELLING at 25.60 (day order) …last trade 25.55 Risk will be the 26.10 level …($500.00) OBJ will be the 24.60 level …$1,000.00 (I highlight the 23.60 level as well for those looking for a longer... Read More.
- Market Spotlight: Cocoa (10/12/2012) - Cocoa is the common name for a powder derived from the fruit seeds of the cacao tree. The Spanish called cocoa “the food of the gods” when they found it in South America 500 years ago. Today, it remains a valued commodity.
- Developing Trade in December Cocoa (CCZ2) (8/30/2012) - This is a sample entry from Tom Dosdall’s email newsletter, Dosdall Daily Edge, published on August 30, 2012. I expect to see the stock market open lower this morning. This might put some downward pressure on the Cocoa market, which has made fresh 9-month highs the last two trading sessions. For those reasons, and the... Read More.