Vontobel is leaning into weather risk. "Cocoa is our preferred bullish El Niño trade," said portfolio manager Renato Mettler, who estimates New York cocoa could climb to $8,000 a ton in six months if forecasts for a record El Niño come through. Futures were trading near $5,200 at the time of his call.
As of Nov. 5, Mettler's $760 million fund had a 2.4% cocoa stake valued at roughly $18 million. He also likes that cocoa has not attracted the heavy bullish crowd that sugar has, leaving more room for buyers if crop concerns intensify. Sugar is another market staring at a potential weather-driven deficit.
The wager extends beyond Vontobel as investors track El Niño's impact in Ivory Coast and Ghana, the core of global cocoa supply. In a Nov. 4 filing, Neuberger's $550 million Commodity Strategy ETF reported almost $6 million in London cocoa futures. In its third-quarter outlook, a Schroder Investment Management commodity fund with $530 million described cocoa as its "highest-conviction bullish agricultural view."
"You've got the weather coming through, the potential of disease impacting crops and an inventory cushion that is not substantial," said Nicole Vettise, who serves as Neuberger's head commodity strategist.
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The bull case rhymes with the runup seen in 2024: weak West African harvests and aging trees already battling swollen shoot and black pod disease. The state meteorological service in Ivory Coast cautioned that the cocoa belt faces rainfall shortfalls and heat stress through early 2027.
Positioning is another wedge. In contrast with sugar, speculative positioning in cocoa is still net bearish, suggesting managed money has not yet piled in despite the El Niño risk. Prices have been choppy this year, retreating sharply from highs above $12,000 reached during the 2024 rally's zenith. So far in 2026, cocoa is down about 13%, while still above long run levels.
Not everyone is chasing a rally. Barry Callebaut AG expects prices to steady, arguing that losses in West Africa could be balanced by higher Latin American production and surplus beans accumulated over the last two years.
El Niño does not just touch cocoa. Rice, coffee and palm oil also carry weather exposure, giving you multiple ways to express a view if supply shocks escalate. The bottom line: track West African weather and disease reports, inventory signals, and whether bearish speculative positioning in cocoa starts to flip.
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