Coffee Falls as Weather Boosts Brazil Harvest; Cocoa Declines

Arabica-coffee futures fell the most in a week on signs that crops being harvested in Brazil, the world’s largest producer, will avoid frost damage. Cocoa and sugar also declined, while cotton and orange juice rose.

Temperatures will remain above freezing in Brazil over the next two weeks, and coffee-growing states of Sao Paulo and Parana will be mostly dry, said Donald Keeney, a meteorologist at MDA Information Systems Inc. in Gaithersburg, Maryland. About 44 percent of the harvest was completed as of July 3, more than the 40 percent a year earlier, crop researcher Safras & Mercado said July 10. Prices are down 34 percent in the past year amid a global surplus, and a plunge in the value of the Brazilian real is encouraging exports.

“Brazilian weather has no frost threats for the next 10 to 20 days, and harvest progress is moving along nicely, so that will weigh on prices,” Sterling Smith, a futures trading specialist at Citigroup Inc. in Chicago, said in a telephone interview. “There is nothing supporting coffee right now.”

Arabica coffee for September delivery fell 2 percent to $1.209 a pound at 10:24 a.m. on ICE Futures U.S. in New York, erasing yesterday’s gain of 1.4 percent and heading for the biggest drop since July 3.

Brazil’s harvest this year will total 53.7 million bags, the third-largest ever, expanding domestic stockpiles by 22 percent to 8.23 million bags, the U.S. Department of Agriculture estimates. A bag weighs 60 kilograms (132 pounds).

Cocoa, Cotton

Cocoa futures for September delivery slid 0.3 percent to $2,232 a metric ton on ICE, after touching $2,260, the highest for a most-active contract since June 14.

Raw-sugar futures for October delivery slipped 0.1 percent at 16.09 cents a pound, after yesterday touching 16.08 cents, the lowest for a most-active contract since July 1, 2010. The sweetener is down 17 percent this year, heading for a third straight decline and the longest slump since 1992.

Cotton futures for December delivery advanced 0.2 percent to 84.88 cents a pound in New York. Prices were up 13 percent this year through yesterday.

Orange-juice futures for September delivery rose 2.4 percent to $1.387 a pound on ICE. Prices were up 15 percent this year through yesterday.

To contact the reporter on this story: Marley DelDuchetto Kayden in Chicago at mdelduchett2@bloomberg.net

To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net

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