MILAN — Ice Arabica most active contract for July delivery in New York closed up by 300 points on fund short covering on Tuesday following weather forecasts that temperatures will fall over the weekend in Brazil’s coffee areas located above 1,000 meters high with some risk of frost.
There are also concerns that that heavy rain will delay harvesting and the bean-drying of Brazil’s coffee crop.
Data from Somar Meteorologia showed that rainfall in Minas Gerais, Brazil’s biggest coffee-growing region, was 50.3 mm in the past week, or 316% of the historical average.
In London, coffee futures for July delivery settled $30 up at $1,364 supported by speculative short-covering.
In other news USDA’s Foreign Agricultural Service (FAS) forecasts Columbia coffee output this year to be unchanged at 14.3 mln bags and for Guatemala coffee output this year to climb to 3.393 mln bags from 3.388 mln bags last year, citing “positive impacts from the low intensity El Nino drought that has increased flowering.”
Indonesia’s 2019-2020 coffee crop is pegged at 10.7 million bags, up 100,000 bags from from a downward revised figure of 10.6 million bags for the previous year.