Coffee Futures Fall as Bigger Brazilian Crop May Spur Sales; Cocoa Climbs

Coffee prices fell the most in a week on speculation that a bigger harvest in Brazil, the world’s largest producer, will spur sales by producers. Cocoa gained.

Brazil’s coffee output may jump 19 percent from a year earlier as trees enter the higher-yielding phase of a two-year cycle, according to the Agriculture Ministry. Major growing regions will be dry through July 30, which is “good for harvesting,” said Jack Scoville, a vice president at Price Futures Group Inc. in Chicago.

“We’re seeing a constant battle between producer selling and a drawdown in exchange stocks,” said Hector Galvan, a senior trading adviser at RJO Futures in Chicago. Sales by Brazilian farmers can drive prices down 15 percent from the current level, he said.

Arabica coffee for September delivery fell 1.85 cents, or 1.1 percent, to $1.6375 a pound on ICE Futures U.S. in New York, the biggest drop for a most-active contract since July 20. The commodity has declined 7.2 percent since reaching a 12-year high of $1.765 on June 24.

On London’s Liffe exchange, robusta-coffee futures for September delivery declined $24, or 1.4 percent, to $1,699 a metric ton.

Cocoa futures for September delivery rose $7, or 0.2 percent, to $2,980 a ton in New York.

In London, cocoa futures for September delivery climbed 1 pound to 2,280 pounds ($3,550) a ton.

To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.

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