Cocoa Rises on Expectations Commodity Demand Will Increase; Coffee Gains
Cocoa climbed in New York to the highest price in more than a week as a jump in profit for aluminum producer Alcoa Inc. revived optimism that an improving economy will boost demand for commodities. Coffee also gained.
Alcoa yesterday reported second-quarter sales and profit that beat analysts’ estimates, and the New York-based company forecast higher global demand for the metal. Stocks rallied, and the Reuters/Jefferies CRB Index of 19 raw materials rose.
Cocoa prices “are primarily moving off of the market-based embracement of risk,” said Adam Klopfenstein, a senior market strategist at broker Lind-Waldock in Chicago. “Economically- sensitive commodities are catching a nice rally.”
Cocoa for September delivery rose $56, or 1.9 percent, to $3,045 a metric ton on ICE Futures U.S. in New York, the biggest gain for a most-active contract since July 1. Earlier, the chocolate ingredient reached $3,052, the highest price since July 1.
On London’s Liffe exchange, cocoa futures for September delivery rose 11 pounds, or 0.5 percent, to 2,397 pounds ($3,633) a metric ton, the biggest gain since July 5.
In the week ended July 6, hedge-fund managers and other large speculators in New York cocoa futures increased their net- long positions, or bets that prices will rise, to the highest level in a month, government data show.
Arabica-coffee futures for September delivery rose 2.1 cents, or 1.3 percent, to $1.6565 a pound in New York. The price has climbed 22 percent this year.
Coffee production in Brazil’s Minas Gerais state, the world’s biggest-growing region, will climb less than estimated this year after rain hurt flowering, said Marcelo Moura Almeida, the chief agronomist at Cooparaiso, a grower’s group that accounts for 9 percent of arabica coffee output in the country.
Production in Minas Gerais will rise 20 percent this year to 23.9 million bags, each weighing 60 kilograms (132 pounds), according to the government’s May 5 estimate. Almeida didn’t give an estimate for the state’s output.
On the Liffe in London, robusta-coffee futures for September delivery climbed $16, or 0.9 percent, to $1,721 a metric ton. The price jumped 33 percent this year.
To contact the reporter on this story: Elizabeth Campbell in Chicago at ecampbell14@bloomberg.net.
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