Cocoa Prices Drop 0.7% to $4,912 - Why Smart Traders Are Actually Buying

When your morning coffee costs more than some stocks, you know commodity markets are having a moment. Cocoa and coffee prices just took a nosedive that would make a submarine jealous, with cocoa futures hitting two-month lows and coffee following suit like a loyal sidekick.

London cocoa dropped 0.7% to 4,912 pounds per metric ton, while New York cocoa slipped 0.2% to $6,988 a ton. Meanwhile, arabica coffee fell 1.9% to $3.4130 per pound, and robusta coffee declined 2.1% to $4,189 a ton. The culprit? A perfect storm of anticipated global surpluses and what traders politely call "origin hedge-s...