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Barchart
Rich Asplund

Cocoa Prices Sharply Higher on Expectations of Commodity Index Buying

March ICE NY cocoa (CCH26) on Thursday closed up +162 (+2.74%).  March ICE London cocoa #7 (CAH26) closed up +109 (+2.56%).

Cocoa prices rallied sharply on Thursday to 1-week highs, rebounding from Wednesday's 1-month lows.  Expectations of index-related buying of cocoa futures to rebalance commodity indexes propelled cocoa prices sharply higher on Thursday.  Peak Trading Research estimates that the annual rebalancing of commodity indexes within the next week could lead to purchases of about 37,000 cocoa futures contracts, representing nearly 31% of the aggregate open interest.

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