Trade ICE Cocoa Futures, Soft Commodity Futures TradingThis contract is the world benchmark for this soft commodity and it reflects the price of physical delivery of cocoa beans considered exchange-grade quality to any of five US delivery points. While there was much attention in 2008 to the explosive growth in commodity prices in general, interestingly cocoa was one of the best performing from a trader’s perspective.
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The volume of ICE cocoa futures contracts has shown steady growth over the last few years, with 2.58 million in 2005, rising to 3.19 million in 2008, though this represented a slight fall back from 3.33 million in 2007. Over the last four years, the highest month was February 2008, which saw 434,965 cocoa futures contracts traded on ICE Futures US. Deliverable growths refers to the perceived cocoa bean quality and is reflected in the paying of a premium of varying quantum or the beans are traded simply at par value. There are three groupings of cocoa bean:Group A-deliverable cocoa beans have a $160 per ton premium, covering crops originating in West Africa, namely Cote D’Ivoire, Ghana, Lome, Nigeria and Sierra Leone. Group B-deliverable cocoa commodity attracts an $80 per ton premium for product coming from Venezuela and other Latin American sources. The Group C cocoa bean is delivered at par value and covers crops from Haiti, Malaysia and others. Contract Symbol : CCContract Size: 10 metric tonnesPrice: US dollars per metric tonne The ICE Cocoa futures contract is listed for March, May, July, September and December, and the minimum price movement is $1.00 per metric tonne (or $10 per contract). Settlement is by physical delivery from Latin America, Asia or West Africa to any one of the following US delivery points: Port of New York, Delaware River Port, Hampton Roads, Albany or Baltimore. Last notice day for this ICE futures contract is 10 business days before the last business day of the delivery month. And the last trading day is the first business day before the last notice day. Trading hours are: 0400 to 1445 in New York and 0900 to 1945 in London. With global demand for cocoa looking strong for the foreseeable future and reports of difficulties in maintaining production levels in West Africa, it looks as if ICE cocoa futures will continue to attract growing attention going forward.
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