As mentioned, cocoa surged higher after Hersey, according to Bloomberg, stepped in and bought a large amount of cocoa futures for delivery during December. As a result, the December price over the March, the next futures contract, jumped from zero to a record 250 dollars. In order to understand why a major chocolate buyer suddenly bids up the price for supplies by more 250 dollars we have to look at the alternative.
Earlier this year Ivory Coast and Ghana, in order to support local farmers, decided to add a hefty $400/ton premium on supplies from the 2020-21 season which began in October. However, faced with reduced demand due to lockdowns buyers have been balking at paying the premium at a time of weakening demand. As a result, the futures price has rocketed while the West African nations still have a lot of cocoa from the current crop to sell.
Platinum jumped above $900/oz to record its best week in four months. What made the move stand out was the fact that gold and silver both went in the opposite direction in response to vaccine news-related profit taking. The rally gathered momentum after the World Platinum Investment Council in its Platinum Quarterly raised the 2020 supply deficit to 1.2 million ounces with a deficit of 0.2 million seen in 2021. Reasons being the stellar rebound in automotive demand and sustained strong investment demand for precious metals, including platinum.
Natural Gas: Finally, not a week without a looser and this time the always-volatile natural gas contract scraped the bottom. Unseasonably warm weather has reduced heating demand, thereby lifting stock levels while delaying the beginning of the winter withdrawal season. Last week, some 31 billion cubic feet went into storage versus a five-year average drop of 24 billion cubic feet.