(Bloomberg) -- Cocoa futures rose in New York as markets weigh an ongoing stockpile drawdown against a rosier outlook for next season’s production.

The most-active contract rose as much as 4.7% on Wednesday, extending gains from the prior session. Supply tightness is coming back into focus, buoying prices that had slumped over the last quarter on hopes of a production rebound.

Favorable weather in Ivory Coast and Ghana, the world’s top growers, is aiding crop development, fueling expectations of a recovery in output for the upcoming cocoa season starting in October. Commodities broker Marex Group expects cocoa output will exceed demand by 303,000 metric tons in the season, marking the first year of surplus after three straight seasons of deficit.

But near-term tightness lingers, as chocolate-makers are still dealing with bean shortages in the spot market following this season’s poor harvest. Bean inventories held in US exchange warehouses have dropped for 30 days straight and are at the lowest level since January 2021.

“Narrow trading range in the last couple of sessions point to market uncertainty, and the futures need to break out of current resistance or support to confirm the longer-term outlook,” said Daria Efanova, head of research at Sucden Financial.

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