Arabica-coffee futures fell for the third time in four sessions after a weather forecaster said Brazil’s crop, the world’s largest, should be undamaged by frost this month. Cocoa also declined.
The prospect of freezing weather in the South American country sent coffee prices to a 12-year high in New York last month. The risk was lowered yesterday when Sao Paulo-based forecaster Somar Meteorologia predicted that Brazil’s main producing area probably will be frost-free through July.
“There were a lot of jitters off of the fact that some cold weather moved into the area earlier than usual,” said Tom Mikulski, a senior market strategist at Lind-Waldock, a broker in Chicago. “With no weather premium and the harvest moving along as scheduled, it’s hard not to be a little bearish right now.”
Arabica coffee for September delivery fell 0.95 cent, or 0.6 percent, to $1.621 a pound on ICE Futures U.S. in New York. Prices have jumped 19 percent this year.
Global coffee output will probably be 133 million to 135 million bags in the year that begins Oct. 1, the International Coffee Organization said today in an e-mailed report from London. That’s up at least 10 percent from the 120.6 million bags estimated for the current year.
Bigger Crops?
“There are indications that production levels are gradually increasing,” Nestor Osorio, ICO’s executive director, said in the report. “A return to normal production levels in a number of producing countries could contribute to the application of corrections as supplies of new crop arrive on the market.”
Brazil’s production may total about 50 million bags, the trade group said. A bag of coffee weighs 60 kilograms (132 pounds).
“Once the harvest is done, you’re going to see a large influx of coffee into the market,” Mikulski said. “If production numbers hold up, I don’t see any reason how this market could hang onto these levels.”
Cocoa futures for September delivery fell $12, or 0.4 percent, to $2,969 a metric ton in New York. Prices have gained 17 percent in the past year.
The prospect of freezing weather in the South American country sent coffee prices to a 12-year high in New York last month. The risk was lowered yesterday when Sao Paulo-based forecaster Somar Meteorologia predicted that Brazil’s main producing area probably will be frost-free through July.
“There were a lot of jitters off of the fact that some cold weather moved into the area earlier than usual,” said Tom Mikulski, a senior market strategist at Lind-Waldock, a broker in Chicago. “With no weather premium and the harvest moving along as scheduled, it’s hard not to be a little bearish right now.”
Arabica coffee for September delivery fell 0.95 cent, or 0.6 percent, to $1.621 a pound on ICE Futures U.S. in New York. Prices have jumped 19 percent this year.
Global coffee output will probably be 133 million to 135 million bags in the year that begins Oct. 1, the International Coffee Organization said today in an e-mailed report from London. That’s up at least 10 percent from the 120.6 million bags estimated for the current year.
Bigger Crops?
“There are indications that production levels are gradually increasing,” Nestor Osorio, ICO’s executive director, said in the report. “A return to normal production levels in a number of producing countries could contribute to the application of corrections as supplies of new crop arrive on the market.”
Brazil’s production may total about 50 million bags, the trade group said. A bag of coffee weighs 60 kilograms (132 pounds).
“Once the harvest is done, you’re going to see a large influx of coffee into the market,” Mikulski said. “If production numbers hold up, I don’t see any reason how this market could hang onto these levels.”
Cocoa futures for September delivery fell $12, or 0.4 percent, to $2,969 a metric ton in New York. Prices have gained 17 percent in the past year.
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