Coffee futures rose to their 32-month high late last night as the Brazilian drought retains its hold on the country.
According to the Wall Street Journal, coffee opened at 220.85¢ on Tuesday, with the morning's high at 224.55¢ and the low 218.60¢. Currently, coffee sits at 221.35¢, above the 32-month high set yesterday.
Bloomberg reported that the 10 day forecast in Brazil's main coffee growing regions showed that the dry weather will persist, and that no meaningful precipitation occurred over the last weekend. Arabica coffee prices have nearly doubled this year as drought lowered the 2014 output. The outlook for 2015 looks similarly grim, analysts say.
Analysts say that the retail market for coffee will feel the rise in Arabica coffee prices as early as the middle of November. As for 2015, Brazil's National Coffee Council expects that farmers will only take in 40 million bags of coffee – creating the large slump in output in the last five decades. Bloomberg also noted that there are some investors betting that coffee futures will climb to $3 a pound
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