Coffee futures moved higher Tuesday as the market found buyers looking to snatch up supplies over concerns that the harvest in Brazil may not be as large as previous estimates.
Arabica coffee for September rose 0.5% to $1.428 a pound on the ICE Futures U.S. exchange, on track for its highest close since April 18.
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"The spot offers are still cheap in comparison to procuring Brazilian coffee from exporters, at least for those who do not need higher quality beans from the largest producing country," Rodrigo Costa, director of trading at Comexim USA, said in a note to clients.
As Brazil, the world's largest coffee producer, approaches the end of the harvest, Mr. Costa said, yields have been lower than expected, which led one major firm to revise its production estimate downward from 56 million bags to 55 million bags, he said. Producers have reported beans that are smaller than expected.
Still, inventories in consuming countries have been steadily rising and speculators in the coffee market have been reticent to bet on higher coffee prices. As of last Tuesday, hedge funds and other money managers were betting on lower prices, with a net-short position of 14,190 contracts, an improvement for the bulls over the previous week when they were outweighed by 24,208 contracts.
In other markets, raw sugar for October was off 0.7% at 13.77 cents a pound, cocoa for September was down 0.5% at $2,019 a ton, frozen concentrated orange juice for September lost 2.3% at $1.31 a pound, and December cotton rose 0.5% to 70.93 cents a pound.
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(END) Dow Jones Newswires
August 08, 2017 11:33 ET (15:33 GMT)