Coffee prices rose Wednesday, helped by a weak dollar in earlier trade. The market closed prior to the conclusion to the Fed's two-day policy meeting, which later lifted the dollar.
Arabica coffee for December delivery closed up 0.9% to end at $1.3655 a pound on the ICE Futures U.S. exchange, breaking a two-day losing streak.
The Fed's policy projections, known as the "dot plot," showed policy makers still expect another rate-increase this year and three next year. Some had expected the Fed to cut rate forecasts amid weak inflation.
The WSJ Dollar Index, which measures the U.S. currency against 16 others, was down 0.3% in earlier trade to 85.06.
Prior to the close of the coffee market, the dollar weakened against many emerging-market currencies, a boost to commodities sold in these countries as a weak dollar helps stoke demand for dollar-denominated goods. Arabica coffee prices were helped lower this week by favorable rains in Brazil, the world's largest growing region. But Rodrigo Costa, director of trading at Comexim USA, said in a note to clients that the dollar's "shy recovery," along with late rains, could point to higher prices.
"Farmers in general are consensually saying, especially those that see their trees suffering, that a normalization of rains will not give back the vigor of the trees that could have been noticed before," he said.
At the same time, coffee stocks in the United States have stopped rising, Mr. Costa noted. According to the Green Coffee Association there was a drop of 147,285 bags in August, with the inventory totaling 7,266,027 bags. The inventories are unlikely to stay down for long, however, as arabica coffee harvests are just over a month away in some major producing regions.
In other markets, raw sugar for March closed up 2.3% at 14.70 cents a pound, cocoa for December was up 1.7% to end at $1,998 a ton, frozen concentrated orange juice for November rose 1.7% to end at $1.547 a pound and December cotton ended flat at 69.25 cents a pound.
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(END) Dow Jones Newswires
September 20, 2017 16:04 ET (20:04 GMT)