Coffee farms in Brazil had feared that a long spell of hot, dry weather might damage their crop, but forecasters are projecting rain for the next week across the state of Sao Paulo and Minas Gerais. That would help keep the coffee harvest strong, and traders reacted by driving down the price of the bean, Bloomberg News reported Monday.
Arabica coffee futures lost almost 4 percent to settle at $1.9195 per pound on the Intercontinental Exchange futures market in New York; on London's Liffe exchange, robusta coffee futures droped 0.9 percent to settle at $1,654 per ton.
The rains in Minas Gerais, writes the news service, are especially important because the trees must experience relatively humid conditions in order to flower and turn into beans properly between September and November.
"Perhaps the threat of dry weather is dissipating," Raymond Keane, a Balzac Bros. trader in Charleston, South Carolina, told Bloomberg. "The rains are starting to increase. That will be good for the coffee."
Cocoa and sugar futures also fell in commodity futures markets around the globe.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
