Marley DelDuchetto Kayden – Bloomberg, 07/22/2013
Coffee futures gained on new forecasts for cold weather that may bring frost damage to crops in Brazil, the world’s largest producer. Sugar and orange juice also advanced, while cotton and cocoa declined.
Temperatures will drop below freezing tomorrow and July 24, posing a significant threat to the southern fringes of Brazil’s coffee-growing areas, Donald Keeney, a meteorologist for MDA Information Systems in Gaithersburg, Maryland, said in a telephone interview. Lows may reach minus 3 degrees Celsius (19.4 degrees Fahrenheit) in southern Parana tomorrow. Damage to Brazil’s coffee tress would help reduce a global glut that helped send prices down 15 percent this year through last week.
“We have some buying on the idea of a frost threat,” Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a telephone interview. “It looks like only the minor growing areas are going to experience any real cold, but we will still see speculative buying until tomorrow, when people are more confident the major growing regions are safe.”