Coffee Futures Decline to 45-Month Low on Ample SuppliesMarvin G. Perez
Coffee futures fell to the lowest since September 2009 on ample supplies of arabica beans used by specialty companies including Starbucks Corp. Orange juice dropped the most in five weeks. Sugar declined, and cocoa rose.
In May, exports from Colombia, the second-largest arabica producer, jumped 45 percent from a year earlier, the National Federation of Coffee Growers said yesterday. Production in Brazil, the top grower, will climb 14 percent in 2013 to 56.1 million bags from a year earlier, a unit of the U.S. Department of Agriculture said in a report. Futures have plunged 20 percent in the past 12 months.
“Colombia is finally seeing some improvement in output, and this is bearish to an already bearish situation,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in an e-mail.
Arabica coffee for September delivery fell 4 percent to settle at $1.2445 a pound at 2 p.m. on ICE Futures U.S. in New York, the biggest decline for a most-active contract since Jan. 22. Earlier, the price touched $1.228, the lowest since Sept. 4, 2009.
Today, trading more than doubled compared with the average in the past 100 days, according to data compiled by Bloomberg. A bag weighs 60 kilograms, or 132 pounds.
The arabica premium above robusta beans traded on London’s NYSE Liffe fell 9 percent to 43.71 cents a pound, the biggest drop since May 22. Robusta, used mostly in instant coffee, has dropped 14 percent in the past 12 months.
Orange-juice futures for July delivery slid 2.1 percent to $1.486 a pound on ICE, the biggest decline since May 6. The price still has jumped 27 percent this year on crop concerns in Florida, the second-biggest citrus grower.
Today, the U.S. Department of Agriculture cut its estimate for Florida’s output by 2.9 percent, exceeding estimates by analysts.
“This was a classical market case when traders buy the rumor and sell the fact,” Jack Scoville, a vice president for Price Futures Group in Chicago, said in an e-mail.
Raw-sugar futures for October delivery slid 0.6 percent 16.57 cents a pound.
Cocoa futures for September delivery gained 0.6 percent to $2,378 a metric ton. Earlier, the price reached $2,384, the highest since May 9.