By Julie Wernau
Coffee futures dropped to a one-month low Wednesday with plenty of beans to go around ahead of the Thanksgiving holiday.
Arabica coffee for March delivery was down 2.5% to close at $1.577 a pound on the ICE Futures U.S. exchange, its lowest close since Oct. 21.
A series of reports from the U.S. Department of Agriculture this week have pointed to robust crops in the two largest arabica growing regions--Brazil and Colombia. The USDA placed the 2016/2017 crop in Brazil at 56.1 million bags, with 45.6 million of those arabica beans. The arabica crop in Brazil, the largest coffee grower in the world, was upwardly revised due to better than expected yields, the agency said, and represents a 26% increase over last year.
In Colombia, coffee production is expected to hit a 23-year high of 14 million bags in the 2016-2017 season, as a rigorous replanting program there that has helped the country recover from a devastating spate of coffee rust that four years ago had slashed production in half.
"The market has significant supply and stocks," the Hightower Report said in a note. The firm said traders should consider buying in a support zone between $1.558 to $1.603 a pound, as stronger outside markets and improving risk sentiment could help the contract find its footing.
A weaker Brazilian real against the dollar following the U.S. presidential election has weighed on coffee prices, as producing countries like Brazil tend to book more sales when they can recoup more of their local currency for dollar sales. The real was down 1.1% recently against the dollar.
In other markets, raw sugar for March lost 0.9% to settle at 19.58 cents a pound, cocoa for March ended flat at $2,439 a ton, frozen concentrated orange juice futures were up 0.8% to end at $2.1225 a pound, and March cotton lost 0.8% to settle at 71.64 cents a pound.
Write to Julie Wernau at firstname.lastname@example.org
(END) Dow Jones Newswires
November 23, 2016 16:08 ET (21:08 GMT)
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