Coffee Falls on Signs of Slack Demand; Cotton Advances

Coffee futures fell for the first time in a week on signs of slack global demand as sales slowed from Brazil, the world’s largest exporter. Cocoa slid, while cotton, orange juice and sugar gained.

As of July 31, Brazilian farmers sold 21 percent of the current coffee crop, down from 28 percent a year earlier, Safras & Mercados, a Porto Alegre, Brazil-based consulting company, said yesterday. Stockpiles at warehouses monitored by ICE Futures U.S. have climbed to the highest since March 2010.

“There’s plenty of coffee around,” Jack Scoville, a vice president at Price Futures Group in Chicago, said in a telephone interview. “A lot of people didn’t get to sell earlier in the year, and this is going to limit the upside.”

Arabica-coffee futures for December delivery tumbled 2.5 percent to settle at $1.23 a pound at 2 p.m. on ICE in New York. The commodity has fallen 14 percent this year.

Cocoa futures for December delivery fell 1.6 percent to $2,458 a metric ton in New York. The price climbed in the previous six sessions, the longest rally in almost a year.

Cotton futures for December delivery advanced 1.8 percent to 91.72 cents a pound on ICE. Earlier, the price reached 92.54 cents, the highest since March 15.

The harvest in the U.S., the largest exporter, will be 13.05 million bales this year, down from 13.5 million forecast last month and the lowest in four years, government data showed yesterday. A bale weighs 480 pounds, or 218 kilograms.

U.S. retail sales rose in July for the fourth straight month, with spending at clothing chains advancing 0.9 percent, government data showed today.

“You’ve got less production coming amid supportive macroeconomic news,” Scoville, said. “People are buying more clothing, including jeans and shirts.”

Orange-juice futures for September delivery advanced 0.5 percent to $1.3145 a pound, snapping a five-session slump. Raw-sugar futures for October delivery gained 0.5 percent to 17.25 cents a pound in New York.

Before it's here, it's on the Bloomberg Terminal. LEARN MORE