Cocoa prices have rebounded, with New York March futures rising 0.83%. In the past two weeks, cocoa has been hit hard, mainly because the EU postponed the forest deforestation regulation, leading the market to believe that supply was not as tight.

But there was a bit of an accident in the past two days: Ivory Coast (the world's largest cocoa producer) has seen a 3.7% decrease in cocoa shipments to ports for the new year compared to the previous year. Coupled with the good weather in West Africa, a cocoa bumper harvest is imminent, while global demand is also sluggish—chocolate sales in the United States are poor, and cocoa processing volumes in Europe and Asia have hit a nearly ten-year low.

Interestingly, U.S. inventories have dropped to an 8-month low, while production in Nigeria (the fifth largest producer globally) continues to decline. Therefore, bulls today made some efforts to cover short positions. This wave of cocoa is a tug-of-war between supply and demand - looking good for short-term harvest, while medium-term looks like a bumper harvest that could be bearish.