Coffee Advances on Signs of Limited Brazil Supplies
Arabica coffee climbed for a second session in New York on signs of limited supply from Brazil, the world’s largest producer. Cocoa and sugar slid.
Farmers in Brazil are hoarding part of their production to wait for price increases, the National Coffee Council said in a report last week. The price has dropped 27 percent this year on forecasts for a bigger harvest in Brazil.
“Brazilian offers remain light,” Jack Scoville, a vice president for Price Futures Group in Chicago, said today in a report. “Farmers there are not offering much, and are offering lower qualities when they offer at all.”
Arabica coffee for December delivery rose 0.3 percent to close at $1.653 a pound at 1:46 p.m. on ICE Futures U.S. in New York. Earlier, the price climbed as much as 1.9 percent.
Hedge funds and other large speculators held the biggest coffee net-short position, or bets on prices declines, since May 2007, with 16,866 contracts in the week ended Aug. 28, data from the U.S. Commodity Futures Trading Commission show.
“Funds are holding a new record short position in New York, and prices have hardly moved,” Keith Flury, an analyst at Rabobank International in London, said by e-mail today. “Roasters seem to be there ready to buy when prices fall.”
Cocoa futures for December delivery slumped 2.3 percent to $2,551 a metric ton in New York.
Raw-sugar futures for October delivery dropped 2.2 percent to 19.34 cents a pound on ICE.
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