Coffee Futures Jump to Eight-Week High on Brazil Frost
By Marley DelDuchetto Kayden - Jul 18, 2013 3:36 PM GMT+0100
Coffee futures jumped to an eight-week high on concern that cold weather will hurt trees in areas of Brazil, the world’s largest producer and exporter. Sugar, cocoa, cotton and orange juice rose.
A cold front moved into the Brazilian states of Sao Paulo and Parana, bringing as much as 5 inches (13 centimeters) of rain and freezing temperatures, Somar Meteorologia said in a report. More precipitation was forecast in the next five to seven days with freezing temperatures from July 23 to July 25. Futures climbed for the fourth straight day, the longest rally in two months.
“Cold temperatures are moving into the coffee belt, and prices are rallying on frost fears,”James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview.
Arabica-coffee for September delivery climbed 3.1 percent to $1.319 a pound at 10:34 a.m. on ICE Futures U.S. in New York. Earlier, the price reached $1.34, the highest for a most-active contract since May 21.
Sugar output in Brazil, the top grower, may be hurt by the wet, cold weather, Michael McDougall, the head of the Brazil trading desk at Newedge Group in New York, said in a report. “If we get further harvest disruptions from rain, you will see more analysts downgrading Brazil’s cane and sugar production.”
Raw-sugar futures for October delivery gained 1.8 percent to 16.37 cents a pound on ICE. A close at that price would mark the biggest gain since June 14. Earlier, the commodity reached 16.45 cents, the highest since July 10.
Cocoa futures for September delivery increased 1.1 percent to $2,325 a metric ton. Earlier, the price reached $2,328, the highest since June 13.
Cotton futures for December delivery rose 0.5 percent to 84.1 cents a pound, snapping a two-day slump.
Orange-juice futures for September delivery rose 0.5 percent to $1.4555 a pound. Earlier, the price reached $1.461, the highest since June 20.
To contact the reporter on this story: Marley DelDuchetto Kayden in Chicago atmdelduchett2@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net.
