Cocoa futures were higher on Wednesday, boosted by a stronger-than-expected first quarter grind in Europe.
Europe’s first-quarter cocoa grind rose 5.5 percent from the same period last year to 358,432 tonnes, the Brussels-based European Cocoa Association said on Wednesday.
Traders had expected a rise of about two to four percent.
“It’s better than expectations and certainly better than consensus,” said Jonathan Parkman, head of agriculture at Marex Spectron. “So that’s a positive thing.”
Parkman said processing was stronger than recent chocolate confectionery demand data released as part of Barry Callebaut’s results, although this could be a sign of higher consumption of high-cocoa premium chocolate.
“We have been having stronger grinds than we have had chocolate confectionery consumption,” Parkman said. “We are of the opinion that there is a greater percentage of cocoa consumption that is not captured in the traditional chocolate confectionery category, such as artisan chocolate.”
Traders will now focus on first quarter grind data from North America on Thursday and Asia on Friday to see if it confirms the stronger-than-expected trend.
Parkman said he expected the North American grind to be flat to one percent higher and the Asia grind to show a year-on-year rise of 9.5 percent.
Frontpage August 7, 2019