Coffee futures rose on supply concerns in Brazil, the world's top producer and exporter. Sugar also gained.
Brazil's National Coffee Council, a group that represents producers, said on June 22 that heavy rain is hurting the crop and the quality of the beans, possibly curbing exports and domestic sales.
“Coffee already harvested is not drying well due to the rains,” Jack Scoville, a vice president at Price Futures Group, in Chicago, said in a report. “There could be some significant quality losses and perhaps some yield losses if the weather does not improve soon.”
Arabica coffee for September delivery increased 1.8 percent to settle at $1.5875 a pound at 2 p.m. on ICE Futures U.S. in New York. The price climbed 2.6 percent last week.
Brazil's coffee regions are expected to have drier, warmer weather this week with cooler nights in Parana, Sao Paulo and southern Minas Gerais, boosting harvest prospects, Somar Meteorologia, a Sao Paulo-based weather analyst, said today in a report.
Eoin Treacy's view Coffee has been among the worst performing commodities over the last year. Having retested the 1997 peak in April 2011, prices have since halved and have become deeply oversold relative to the 200-day MA in the process. The 150¢ area represents a potential area of support and today's upward dynamic suggests a relief rally is underway. A sustained move below that area would be required to check potential for some additional upside.Back to top