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Coffee Closes at 12-Year High on Fund Demand, Dollar's Slump; Cocoa Gains
Coffee jumped, closing at the highest price in 12 years, as hedge funds boosted purchases and the dollar’s slump enhanced the allure of commodities. Cocoa also gained.
The greenback fell to a three-month low against a basket of six major currencies. The Reuters/Jefferies CRB Index of 19 raw materials surged to the highest level since May 5. In the week ended July 20, net-long positions held by hedge-fund managers and other large speculators in New York coffee futures rose for the sixth straight week to the highest level since March 2008.
“The market broke through $1.70, and that triggered a lot of buying from speculators and funds,” said Hernando de la Roche, a director at Hencorp Futures in Miami.
Arabica coffee for September delivery surged 5.65 cents, or 3.4 percent, to close at $1.7305 a pound at 2 p.m. on ICE Futures U.S. in New York, the highest settlement for a most- active contract since Feb. 23, 1998. This year, the price has gained 27 percent, the most among CRB components.
Earlier, coffee reached $1.746, the highest intraday price since June 24. On that date, the commodity climbed to a 12-year high of $1.765.
“The dollar is falling, giving commodities a boost in general,” said Fain Shaffer, the president of Infinity Trading Corp in Medford, Oregon.
Arabica prices in Brazil, the world’s biggest producer, will stay near a five-year high as rising demand outpaces supply, according to Cepea, a research group at the University of Sao Paulo.
On London’s Liffe exchange, robusta-coffee futures for September delivery gained $26, or 1.5 percent, to close at $1,747 a metric ton at 5:30 p.m. local time.
Cocoa futures for September delivery climbed $36, or 1.2 percent, to settle at $3,046 a ton at 12:03 p.m. in New York.
Cocoa futures for September delivery rose 15 pounds, or 0.7 percent, to close at 2,286 pounds ($3,570) a ton at 4:50 p.m. in London.
To contact the reporter on this story: Yi Tian in New York at ytian8@bloomberg.net.
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