1. Introduction to Commodities
  2. Commodities: Cocoa
  3. Commodities: Coffee
  4. Commodities: Copper
  5. Commodities: Corn
  6. Commodities: Cotton
  7. Commodities: Crude Oil
  8. Commodities: Feeder Cattle
  9. Commodities: Gold
  10. Commodities: Heating Oil
  11. Commodities: Live Cattle
  12. Commodities: Lumber
  13. Commodities: Natural Gas
  14. Commodities: Oats
  15. Commodities: Orange Juice
  16. Commodities: Platinum
  17. Commodities: Rough Rice
  18. Commodities: Silver
  19. Commodities: Soybeans and Soybean Oil
  20. Commodities: Sugar
  21. Commodities: Wheat
  22. Understanding Commodities Trading

Cocoa is a member of the “softs” commodity group: those that are grown, rather than mined. As a commodity, cocoa refers to cocoa beans, which are the dried seeds of the Theobroma tree – from the Greek theos, meaning “god” and broma, meaning “food.” Once used as a common currency, cocoa today is used primarily in the production of chocolate and other products, such as cocoa butter.

Contract Specifications

Ticker Symbol

CJ (CME Globex)

CC (ICE)

Contract Size

10 metric tons

Contract Months

H, K, N, U, Z

Trading Hours

CME Globex: Sunday – Friday, 6:00 p.m. – 5:00 p.m. (there’s an hour break from 5:00 to 6:00 p.m. each day)

ICE: Monday – Friday, 4:45 a.m. – 1:30 p.m.

Last Trading Day

One business day prior to last notice day (last notice day is 10 business days prior to the last business day of the delivery month)

Price Quote

U.S. dollars and cents per ton

Tick Size

$1.00 per ton ($10 per contract)

Production        

The cocoa tree needs a specific climate to thrive: It’s a shade-loving tree native to the rainforest understory that grows best in regions that are 20 degrees north or south of the Equator. Cocoa trees take about five years to reach maturity and bear fruit, at which time about 20 pods might be ready for harvest (in general, 10 pods produce 2.2 pounds of cocoa). Worldwide, the top three producers are Cote d’Ivoire, Ghana and Indonesia. While West Africa accounts for about 70% of global market share, Latin America is a key player, thanks to Brazil, Ecuador, Mexico, Peru, Dominican Republic, Columbia, Venezuela and Guatemala.

Price Drivers

The price of cocoa is influenced by several factors, any of which can trigger significant price swings in a relatively short time period. Key price drivers include:

  • weather conditions
  • geopolitical tensions
  • climate shifts (which can affect conditions for healthy growth)
  • labor (cocoa relies heavily on cheap labor and new labor regulations can impact price)

 

 


Commodities: Coffee
Related Articles
  1. Investing

    Cocoa: A Sweet Portfolio

    Cocoa represents an interesting long term option, and shouldn't just be considered during the holidays.
  2. Investing

    Anthony Ward's Cocoa Hedge Fund Reports Historic First Loss

    The famous trader saw a loss in 2016 after a decade of uninterrupted gains.
  3. Investing

    Hershey Investing $500 Million in Sustainability

    Hershey (NYSE: HSY) has created a comprehensive plan to address cocoa sustainability called "Cocoa for Good." The program aims to address what the company identifies as the most pressing issues ...
  4. Investing

    Big Chocolate Admits to Impact on Deforestation

    Cocoa buyers have six months to form a plan of action to combat major deforestations in Africa.
  5. Investing

    Could the World Run Out of Chocolate?

    Chocolate lovers, beware! Is it time to start stockpiling your favorite brands?
  6. Investing

    How To Valuate The Market Price Of A Commodity

    We explain how to analyze the market price of commodities including, gold, cocoa, and wheat.
  7. Investing

    Trading The Soft Commodity Markets

    Learn the contract specifications for a few of the most heavily traded commodities.
  8. Investing

    4 Commodities Affected By World Conflicts

    What happens to commodities when political disagreements lead to war?
  9. Insights

    Top 5 Companies Owned by Cargill

    Cargill is the largest privately held company in the United States, and these five companies demonstrate the agricultural giant’s diverse product line.
Frequently Asked Questions
  1. What is the role of the nation-state in globalization?

    Learn about the evolving role of the nation-state in an increasingly globalized world as fewer boundaries restrict international ...
  2. What are some examples of positive correlation in economics?

    Learn the most common examples of positive correlation in macroeconomics and microeconomics, including demand and price, ...
  3. Human capital vs. physical capital: What is the difference?

    Learn the difference between physical capital and human capital. How to find the value of each type of capital in a company's ...
  4. Which factors can influence a country's balance of trade?

    Find out about the factors that affect a country's overall balance of trade and how it is used as an economic indicator.
Trading Center