Coffee Futures Jump to Eight-Week High on Brazil Frost

Sugar climbed to a one-week high on concern that output in Brazil, the world’s top grower, may be hurt by wet, cold weather. Cotton and cocoa also rose, while coffee and orange juice fell.

A cold front moved into the Brazilian states of Sao Paulo and Parana, bringing as much as 5 inches (13 centimeters) of rain and freezing temperatures, Somar Meteorologia said in a report. More precipitation was forecast in the next five to seven days with freezing temperatures from July 23 to July 25.

“If we get further harvest disruptions from rain, you will see more analysts downgrading Brazil’s cane and sugar production,” Michael McDougall, the head of the Brazil trading desk at Newedge Group in New York, said in a report.

Raw sugar for October delivery gained 0.6 percent to settle at 16.18 cents a pound at 2 p.m. on ICE Futures U.S. in New York, after touching 16.45 cents, the highest since July 10.

Cotton futures for December delivery rose 1.4 percent to 84.85 cents a pound, snapping a two-day slump. Cocoa futures for September delivery increased 2 percent to $2,347 a metric ton, after touching $2,352, the highest since June 13.

Coffee retreated from an eight-week high earlier on reduced concern that the cold weather in Brazil will damage crops.

“Coffee hasn’t had a reason to rally for months, so people read about freezing temperatures and prices go up, but the coldest areas are not in the main growing regions,” James Cordier, the founder of Optionsellers.com in Tampa, Florida, said in a telephone interview. “The crop will be relatively unaffected.”

Arabica-coffee futures for September delivery fell 0.3 percent to $1.2755 a pound, after touching $1.34, the highest for a most-active contract since May 21. The prices is down 11 percent this year.

Orange-juice futures for September delivery slumped 1.2 percent to close at $1.4305 a pound, the first drop in five sessions.

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