Coffee Falls to 2-Week Low on Ample World Supply; Cotton Steady
Coffee futures fell to a two-week low on signs of ample global supplies and few threats of weather damage to crops in Brazil, the world’s biggest producer and exporter. Cotton was little changed.
As of July 26, stockpiles of coffee at warehouses monitored by ICE Futures U.S. rose to the highest since late May, exchange data show. Harvesting in Brazil will benefit from mostly dry weather through Aug. 12 and no risk of freeze damage, Sao Paulo-based Somar Meteorologia said today. Prices tumbled 15 percent this year through July 26. The U.S. Department of Agriculture estimates global output will exceed demand for the fourth straight season.
“The market understands that the surplus in production against consumption prevails, and this should not change the bearish behavior for prices,” Rodrigo Costa, a trading director at Caturra Coffee Corp., wrote in a report for Sao Paulo-based Archer Consulting, where he is a contributor. Producers are using rallies to sell, he said.
Arabica coffee for September delivery slid 1.1 percent to $1.2085 a pound at 11:17 a.m. on ICE in New York, after touching $1.198, the lowest for a most-active contract since July 15.
Cotton futures for December delivery was up less than 0.1 cent at 85.15 cents a pound on ICE, after fluctuating between gains and losses.
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