Coffee Bulls Sell on Rain Forecasts
17 August 2017 - 11:16PM
Dow Jones News
By Julie Wernau
Coffee futures dove lower Thursday with rain forecast for coffee
growing regions that have recently been in drought.
Arabica coffee for December fell 1.8% to end at $1.3205 a pound
on the ICE Futures U.S. exchange.
Coffee futures have been rising lately on the view that dryness
in Brazil, the world's largest growing region, would affect coffee
that is still months from harvest.
"The market probably overpriced the drought scenario and the
market now is probably liquidating on the rains in Brazil," said
Rodrigo Costa, director of trading at Comexim USA. "And it's
probably doing it wrongly because we need a continuation of these
rains. We have to watch carefully."
MDA Weather Services said widespread showers are expected in Sao
Paulo and Parana over the next five days but dry weather is
expected across the majority of the coffee areas in the following
week.
Inventories of coffee in consuming countries remain high, and
coffee exports in Brazil are at their lowest levels since 2004, Mr.
Costa said, and are unlikely to bounce back if prices resume a
downtrend.
In other markets, raw sugar for October was up 2.7% at 13.29
cents a pound; cocoa for December rose 1.6% to $1,869 a ton; frozen
concentrated orange juice for September was up 1% at $1.431 a
pound; and December cotton was flat at 66.84 cents a pound.
Write to Julie Wernau at julie.wernau@wsj.com
(END) Dow Jones Newswires
August 17, 2017 17:01 ET (21:01 GMT)
Copyright (c) 2017 Dow Jones & Company, Inc.