Commodity Blog

Commodity Prices – Coffee

Coffee slipped today on forecasts about high output in Brazil. Analysts think that the previous high prices haven’t reflected the supply and demand balance and the correction was expected. September delivery for Arabica-coffee fell $0.008 (0.5 percent) to $1.60 per pound by 8:32 on ICE Futures U.S.

Wheat declined today for the third consecutive session as hot weather in the U.S. made fields dry enough for harvest. U.S. winter crop harvest was completed at 17 percent as of June 20th, up from 9 percent the week before. September futures for wheat delivery slid $0.04 (0.8 percent) to $4.7325 per bushel by 10:07 on CBoT.

Hog and cattle futures gained today as prices for wholesale-meat rose with expectations of increased demand in the U.S. as summer grilling started. Demand should increase with the coming of the U.S. Independence Day holiday on July 4, encouraging grocers to increase their stockpiles. August futures for hog settlement rose $0.00325 (0.4 percent) to $0.84675 per pound as of 10:11 on CME.

Wheat rose today amid speculations that planting in Canada might be at its lowest level in almost four decades because of excessive precipitation. Farmers in Canada, the second largest grower of the grain in the world, may plant 19.15 million acres of wheat, down 18 percent from the previous year and the lowest level since 1971. September futures for wheat delivery gained $0.0175 (0.4 percent) to $4.785 per bushel on the Chicago Board of Trade.

Sugar dropped today from its highest level in seven weeks as traders think that prices rallied too much. Analysts say that fundamentals remain unchanged and the decline is just correction after an excessive rally. October delivery for raw sugar slipped $0.0045 (2.8 percent) to $0.156 per pound on ICE.

Arabica-coffee also declined on the opinion that its rally was overdone. Experts have divided opinions on an optimal price level for Arabica-coffee. Some say that current price is where it has to be, while others argue that fundamentals are pointing to higher price. September delivery for Arabica-coffee slid $0.018 (1.1 percent) to $1.578 per pound on ICE.

Coffee futures jumped today on signs of declining global supplies. Vietnam exports of coffee in the previous month were 10 percent less than predicted. Output from El Salvador expected to be 1.075 million bags in the year ending September 30th, compare to previous forecasts of 1.52 million. July delivery for Arabica coffee jumped $0.0095 (0.7 percent) to $1.337 per pound on ICE Futures U.S. in New York.

Sugar gained in New York on amid growing demand and as buyers increase inventories. Unfavorable weather in Brazil and India in the previous year caused supplies to decline and sparked speculations about possible deficit if the sweetener. July delivery for raw sugar gained $0.0011 (0.7 percent) to $0.1536 per pound on ICE.

Soybeans advanced on speculation that European debt crisis will be outweighed by growing demand for food and livestock feed from China. China plans to import 46 million metric tons in the year that ends October 1st and may import as much as 49 million next year. July futures for soybean delivery advanced $0.075 (0.8 percent) to $9.38 per bushel on CBoT.

Wheat prices slipped to a monthly low after report that U.S. stockpiles will touch the record level in 22 years. U.S. wheat inventories will increase to 27.2 million metric tons by May 31st. Before today wheat slid on speculation about growing world supplies. May futures for wheat delivery declined $0.03 (0.6 percent) to $4.785 per bushel as of 10:14 on CBoT.

Coffee futures gained in New York after stockpiles dwindled to lowest level in seven years. Coffee inventories slid to 2.7 million bags (1.2 percent) in ICE-monitored warehouses on March 9th. Earlier coffee futures rose as global supplies waned. May futures for Arabica-coffee delivery went up $0.004 (0.3 percent) to $1.3315 per pound by 10:21 a.m. on ICE in New York.

Coffee may rise 21 percent in two months on lack of high quality supplies. The output in Columbia, the second largest grower in the world, fell to the lowest in 33 years because of adverse weather. Analysts predict that global demand will be about 131 million bags, while world production will be around 124 million bags in 2010. May futures for Arabica-coffee delivery slid $0.0515 (3.8 percent) to $1.319 per pound today in New York.

Corn and soybean prices advance with rising gasoline price, boosting the attractiveness of fuels produced from grain and oilseeds. Gasoline prices reached the highest level in five weeks, increasing demand for corn-based ethanol and biodiesel made from soybeans. May futures for corn delivery gained $0.11 (3 percent) to $3.8275 per bushel on the Chicago Board of Trade. May futures for soybean delivery rose $0.145 (1.5 percent) to $9.69 per bushel.

Coffee slid New York as the stronger dollar curbed demand for commodities as an alternative investment. The greenback gained for the first time this week versus a basket of six major currencies. March futures for Arabica-coffee delivery slid $0.006 (0.5 percent) to $1.298 per pound by 9:51 on ICE Futures U.S. in New York. Coffee price may tumble to $1.20 if the dollar rally will continue, yet the coffee may rise with deficit of high quality coffee and in case of dollar decline. The coffee price increased previous year because adverse weather harmed harvests in Brazil and Colombia.

Sugar rose on speculation that farmers in India will not significantly increase planting of cane. A less-than-expected increase in planting area can lead to import of sugar by India, supporting prices. March futures for raw-sugar delivery rose 1.8 percent to $0.2707 per pound on ICE.

Cocoa futures dropped after the dollar gained, causing an equity decline and, as a result, the investment attractiveness of commodities to wane. Decline is also caused by concerns that jobless rate in the U.S. and rising debt in Europe will stall economic revival. Analysts say that “equities can very easily break cocoa”. May futures for cocoa delivery fell $55 (1.7 percent) to $3,125 per metric ton on ICE Futures U.S. in New York.

Coffee price tumbled to the four-month low. Analysts say that this drop caused by the dollar’s rebound, not fundamentals. The dollar’s advance may convince investors and funds to take money out of commodities. March futures for Arabica-coffee delivery waned $0.0145 (1.1 percent) to $1.3155 per pound today.

Sugar went down in New York to the two-week low as the dollar rebounded against the euro, curbing investment appeal of the commodity. The U.S. currency gained 1.2 percent versus the euro, putting commodities under pressure. Some analysts say that sugar will be traded in a range of $0.27–$0.29 in the next couple of months if it wouldn’t fall below $0.27 now. March futures for raw-sugar delivery slid $0.0062 (2.2 percent) to $0.28 per pound by 13:08 on ICE.

Wheat prices dropped to a lowest in three months on speculation that demand for grain from the U.S. will fall and global stockpiles will increase. Analysts say that global inventories will rise 19 percent in the year ending May 31st. Futures also fell as the strengthening dollar cut the attractiveness of U.S. exports. March delivery for wheat futures dropped $0.03 (0.6 percent) to $4.975 per bushel on the Chicago Board of Trade.

Coffee futures tumbled to the two-week low as the dollar gained, curbing the demand for commodities as an alternative investment. Coffee has gained 21 percent in 2009 as the dollar slid and supplies of coffee beans from Brazil and Colombia declined. Analysts forecast that commodities may fall in the next few weeks as China is going to raise interest rates. March futures for Arabica-coffee delivery slid $0.017 (1.2 percent) to $1.392 per pound on ICE.

Coffee gained in New York on speculation that declining production in Colombia and Mexico will increase global demand. Coffee crop in Mexico may be harmed by cold weather. Analysts say that harvest in Columbia will be 9 million bags of coffee beans in the year through September, 26 percent down from June forecast. March futures for Arabica-coffee delivery rose $0.004 (0.3 percent) to $1.435 per pound as of 10:06 on ICE.

Orange-juice futures slid on speculation that warm weather in Florida, the second largest orange grower in the world, is lowering the risk that cold will harm citrus plants. As concern about frost damage recedes volatility is returning to the market. March futures for orange-juice delivery dropped $0.027 (2 percent) to $1.337 per pound by 12:31 on ICE Futures U.S. in New York.

Soybeans went up to the highest in two weeks with rising demand in China and U.S. Prices was also boosted by drought in Brazil and Argentina, decreasing soybeans exports from these countries in 2009. March futures for soybean delivery went up $0.0025 to $10.62 per bushel on the Chicago Board of Trade.

Coffee futures touched a record in 15 months on outlook that yield will drop in Brazil and Vietnam, the largest producers in the world. Coffee prices may also rise with colder weather boosting demand. March futures for Arabica-coffee delivery increased $0.0135 (0.9 percent) to $1.4725 per pound on ICE.

Wheat slid as the stronger dollar forced down demand for exports from the U.S. As crop is being harvested in Australia, while some countries like Canada and France also have wheat for sale, it looks like supply just exceeds demand. March futures for wheat delivery slid $0.0675 (1.2 percent) to $5.3675 per bushel on CBT.