New York-traded arabica coffee futures dropped sharply Wednesday as bulls who had gotten into the market last week ran for the exits.
Arabica coffee for December lost 1.7%, to end at $1.2295 a pound, on the ICE Futures U.S. Exchange, the lowest close since June 22.
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The market sold off last week because of favorable weather in Brazil for coffee, said Nick Gentile at NickJen Capital, but he said he expects prices to drop even further, possibly as down to $1.16 a pound before he would put in a long position.
"We're near a record short in coffee. I don't know how much more they want to press to the downside, but they're pressing it today," he says. Arabica was down 2.3%, at $1.222 a pound.
Adding to the selling, R.J. O'Brien & Associates told clients that a public holiday Thursday in Brazil, the world's largest coffee producer, likely added to the selling with many commercial houses taking advantage of the holiday and selling ahead of the break.
The International Coffee Organisation reported that the global coffee exports for the month of September were 14.8% lower than the same month last year, at a total of 8.34 million bags. Still, global coffee exports for the October 2016 to September 2017 coffee year were 4.8% higher than the previous coffee year, at a total of 122.45 million bags. That has led to rising levels of coffee stocks in consuming nations like the U.S., weakening demand ideas.
In other markets, raw sugar for March was off 0.9%, at 14.61 cents a pound; December cocoa rose 1.4%, at $2,123 a ton at the close; frozen concentrated orange juice for January lost 1.6%, to $1.5205 a pound; and December cotton was off 0.3%, at 68.17 cents a pound.
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(END) Dow Jones Newswires
November 01, 2017 16:10 ET (20:10 GMT)