July 8, 2019//-Arabica-coffee futures fell to a one-week low in volatile trading on speculation that frost damage to Brazil’s crop won’t be severe.
At around 740am New York time, the price plunged as much as 5.2% after opening overnight with a gain of as much as 3.2%.
Frost from the most-intense polar air mass since 2013 reached coffee lowlands and sugar-cane plantations in the southern region of Mato Grosso do Sul and Sao Paulo states in Brazil, the biggest exporter of the commodities.
While it will take time to assess the full impact, the main damage may be limited to leaves burning, meaning trees still have time to rebound for the next harvest, Nelson Salvaterra, broker at Rio de Janeiro-based Coffee New Selection, says in a text message.
Brazilian farmers had boosted sales after a three-week rally. Futures touched a 13-year low in May on the outlook for amid ample global inventory.
Cocoa futures rise as much as 4.2% to the highest in almost a year. *T Drivers Cold weather slammed into Brazil’s main arabica-coffee regions over the weekend Trees in the lowlands were most affected in many regions of Minas Gerais, said Regis Ricco Alves, a director at consulting company RR Consultoria Rural.
Although some trees that faced medium levels of damage may partially recover in the coming months, they “may not produce at their full potential in the next harvest,” According to Jura S8 “Minor leaf burn but minimal permanent damage” seen from light Brazil frost over 25% of the coffee belt, Commodity Weather Group in Bethesda, Maryland, says in a report Rabobank last week raised its forecast for Brazil’s 2019 arabica production, citing larger-than-expected stockpiles *T *T.
Prices Arabica coffee for September delivery declines 2.2% to $1.0865/lb on ICE Futures U.S. in N.Y. after touching $1.053, the lowest for a most-active contract since June 25 On July 5, futures reached $1.1565, the highest since Nov. 20 Cocoa futures for September delivery jump 4.3% to $2,570/ton after reaching $2,572, the highest since July 16, 2018.
AFRICA : Good Ivory Coast Rains; Black-Pod Disease in Ghana *T *T Market talk “While frost occurred in many states, it was probably limited to areas where there is a little coffee planted,” Salvaterra of Coffee New Selection says.
“Beside that, it probably reached mostly the leaves, which can partially recover for the next harvest” In Brazil, “damage reports are sketchy, but looking at various reports, the weather is likely to have an impact on next year’s crop from these regions, with a small effect on this year’s output,” Gary Herbert , senior coffee broker at Sucden Financial, says in a note “Temperatures are expected to increase with no cold threat in the next few days onward” *T *T Other softs markets Brazil’s cane areas may also have seen some damage from the cold weather, though the impact isn’t yet known, Green Pool Commodity Specialists says Raw-sugar futures for October delivery rise 0.4% to 12.41c/lb .
Bloomberg
