MILAN – Arabica coffee futures ended the first full week of trading in 2015 on the rise as concerns about the situation in Brazil continues amid traders.
The benchmark contract for March ended 315 points higher at US$180.05 per pound after a session marked by heavy volume.
Arabica-coffee prices have surged 11.8% this year in the futures market, as dwindling rains in Brazil, the world’s largest grower, spur traders to once again bet on higher prices.
The net-long position in coffee rose 6.6 percent to 27,071 futures and option contracts in the week ended Jan. 6, the biggest gain since mid-October, according to U.S. Commodity Futures Trading Commission data published Jan. 9. Long wagers climbed by 2,492 contracts, offsetting a rise in short holdings of 806 contracts.
Growing regions are forecast to get about half the normal rainfall this month and in February, according to Celso Oliveira, a meteorologist at Somar Meteorologia, a closely watched São Paulo-based weather forecaster.
Northern regions of Brazil will remain “almost completely dry” in the next two weeks, while light rain is expected in southern Minas Gerais and most of Sao Paolo, Donald Keeney, a meteorologist with MDA Weather Services in Bethesda, Maryland, said in Jan. 8 interview.
“For this month, we expect rain within the average–the problem will be the distribution,” according to Marco Antonio dos Santos, another agro-meteorologist at Somar Meteorologia.
“If we only get it as localized downpours, then some areas, or even some farms, could get less rain than they need. We’d need good rain above the average to be ideal.“