A weaker dollar supported commodities prices broadly on the first trading day of 2018 and also lent a helping hand to coffee and cocoa.
Arabica coffee for March added 3.2% to $1.3020 a pound on the ICE Futures U.S. exchange, extending a recent rally, while cocoa for March climbed 2.3% to $1,936 a ton. The falling dollar makes commodities denominated in the U.S. currency cheaper for overseas buyers. The WSJ Dollar Index, which tracks the dollar against a basket of 16 other currencies, fell for the sixth-straight session Tuesday, declining 0.4%.
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If the dollar extends its recent drop, "commodities prices in general are going to start looking a lot better here," said Jack Scoville, vice president at Price Futures Group. "That's definitely helping both these markets along."
Mr. Scoville added that investors covering short positions as a result of possible supply disruptions could be boosting prices. The latest Commodity Futures Trading Commission data released Friday showed speculative investors added to short positions in both commodities during the week ended Dec. 26.
Coffee prices fell 8% in 2017, while cocoa dropped 11%. Analysts have forecasted supply surpluses in both commodities for 2018.
In other markets Tuesday, March raw sugar added 1.1% to 15.33 cents a pound, March frozen-concentrated orange juice was down 0.2% at $1.3655 a pound, and March cotton fell 1.4% to 77.50 cents a pound.
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(END) Dow Jones Newswires
January 02, 2018 15:25 ET (20:25 GMT)