July ICE NY cocoa (CCN26) on Tuesday closed up +260 (+6.70%), and July ICE London cocoa #7 (CAN26) closed up +175 (+5.88%).
Cocoa prices rallied to 2.5-week highs on Tuesday and settled sharply higher. Cocoa markets are pricing in weather risks after an El Niño weather pattern was confirmed last week. An El Niño typically brings warmer, drier conditions to West Africa, reducing soil moisture, stressing cocoa trees, and lowering yields.