New York cocoa prices rebound, traders watch for buying pressure from index rebalancing.

New York cocoa futures rebounded from recent lows in the past two weeks, as the market anticipates index-related buying pressure to come in and supply uncertainty to persist. After hitting its lowest point since December 9 on Monday morning, futures prices briefly rose by 2.7%. With cocoa being included in the Bloomberg Commodity Index, Citigroup estimates that the index rebalancing in early January could attract up to $2 billion in buying pressure. Peak Trading Research estimates that this could trigger buying of about 31,190 contracts. Peak Trading Research founder Dave Whitcomb points out that cocoa futures are one of the most oversold commodities in the agricultural market, making them prone to rebounds.