BS: Coffee Rises on Threat of Frost Damage in Brazil; Sugar Advances
Coffee futures gained on new forecasts for cold weather that may bring frost damage to crops in Brazil, the world’s largest producer. Sugar and orange juice also advanced, while cotton and cocoa declined.
Temperatures will drop below freezing tomorrow and July 24, posing a significant threat to the southern fringes of Brazil’s coffee-growing areas, Donald Keeney, a meteorologist for MDA Information Systems in Gaithersburg, Maryland, said in a telephone interview. Lows may reach minus 3 degrees Celsius (19.4 degrees Fahrenheit) in southern Parana tomorrow. Damage to Brazil’s coffee tress would help reduce a global glut that helped send prices down 15 percent this year through last week.
“We have some buying on the idea of a frost threat,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “It looks like only the minor growing areas are going to experience any real cold, but we will still see speculative buying until tomorrow, when people are more confident the major growing regions are safe.”
Arabica coffee for September delivery rose 0.3 percent to $1.2305 a pound at 10:01 a.m. on ICE Futures U.S., heading for the first gain in three sessions. On July 18, the price reached $1.34, the highest since May 21.
Raw-sugar futures for October delivery gained 0.4 percent to 16.36 cents a pound in New York, the fourth straight gain. Prices are down 17 percent this year through last week.
Orange-juice futures for September delivery rose 0.7 percent to $1.456 a pound, after touching $1.4795, the highest for a most-active contract since June 18. The commodity is up 23 percent this year through last week.
Cotton futures for December slid 0.1 percent to 86.06 cents a pound, after fluctuating between gains and losses.
Cocoa futures for September delivery fell 0.8 percent to $2,345 a metric ton on ICE.
To contact the reporter on this story: Marley DelDuchetto Kayden in Chicago at mdelduchett2@bloomberg.net
To contact the editor responsible for this story: Steve Stroth at sstroth@bloomberg.net
