July 29 (Bloomberg) -- 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 declined.
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. 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 futures for September delivery slid 0.9 percent to settle at $1.2115 a pound at 2 p.m. on ICE in New York, after touching $1.198, the lowest for a most-active contract since July 15. Prices have tumbled 16 percent this year.
Cotton futures for December delivery dropped 0.5 percent to 84.71 cents a pound on ICE, the second straight decline. Earlier, the commodity reached 84.56 cents, the lowest since July 18.
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