Arabica-Coffee Futures Surge to More than 5-Month High; Cotton Falls
Lack Of Brazil Rain Causes Concern
For Production This Year And Next
By Alexandra Wexler
October
2, 2014
NEW
YORK—Arabica-coffee prices surged on Thursday, as traders and investors
continued to worry that dry weather in top grower and exporter Brazil would
lead to fewer beans next year.
During
the trading session, arabica futures soared 6.7% in price to its highest in
more than five months, but the contract for delivery in December on ICE Futures
U.S. pared gains later in the session to end 4.1% higher at $2.0860 a pound. It
was the highest settlement since Sept. 2.
"Coffee
is pretty much going solo on the upside after triggering more (buy) stops and
attracting new fund buying ahead of postponed forecasts for rains in
Brazil," said Rodrigo Costa, head of the coffee desk at brokerage Newedge
in New York. "Everyone is afraid of the unknown."
Brazil's
worst drought in decades has clipped output and sent futures prices up 88%
since the start of 2014, pushing up prices for consumers. But when unseasonable
rains fell in July, some trees started to flower prematurely. The rains were
followed by more dry weather, which could force coffee trees to drop the
flowers and not produce cherries, the fruit that surrounds the seeds that are
roasted to make beans.
Brazil's
coffee-growing areas are expected to remain mostly dry until the second week of
October, according to São Paulo-based forecaster Somar Meteorologia. That lack
of moisture could hurt arabica trees already weakened by Brazil's drought.
In
other markets, cocoa for delivery in December fell 2.6% to $3,090 a ton, the
lowest settlement price since Sept. 16, as investors continued to book profits
in the market.
Prices
for the key chocolate ingredient surged recently on concerns that the deadly
Ebola outbreak in West Africa could reach Ivory Coast or Ghana, which together
produce about 60% of the world's cocoa. No cases of the virus have been
reported in either country, but Ivory Coast shares a border with Liberia and
Guinea, two of the countries hardest hit by the virus.
Orange
juice for November delivery ended down 1.3% at a one-week low of $1.43 a pound,
while December-delivery cotton shed 0.5% to settle at 61.85 cents a pound. Raw
sugar for March delivery closed at 16.05 cents a pound, up 0.1% on the day.
----
No comments:
Post a Comment
Join the conversation