By Fabiana Batista and Marvin G. Perez
Arabica-coffee futures fell for the seventh straight session amid renewed concern that the coronavirus pandemic will erode demand.
The U.S. death toll from the virus exceeded 200,000, and Federal Reserve Chair Jerome Powell said the economy has a long way to go before fully recovering from the pandemic. British Prime Minister Boris Johnson announced new restrictions that are likely to last six months. France reported 10,008 new coronavirus cases on Tuesday,
Last week, coffee futures tumbled 14%, the most in 22 years, amid a bean glutin Brazil, the world’s top producer and exporter. Crops may get beneficial rain, and the real’s weakness against the dollar might boost the allure of exports priced in the greenback.
“At this point, I think the funds are now under water and are just getting out,” Nick Gentile, managing partner at New York-based NickJen Capital Management, said in an email. “We have to see what happens with Covid over the next few weeks. If we see more closures, it could get really ugly for all agricultural commodities.”
Raw-sugar futures rose to a six-month high, and cocoa fell to a one-week low.
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Arabica coffee for December delivery fell 1.2% to close $1.1065/lb after on ICE Futures U.S. in New York touching $1.1035, the lowest for a most-active contract since July 29
The seven-session slump was the longest since Aug. 20, 2018
Raw-sugar futures for March delivery rose 2.1% to 13.41c/lb after reaching 13.49c, the highest since March 6
Cocoa futures for December delivery tumbled 2.8% to $2,556/ton after touching $2,547, the lowest since Sept. 14
For coffee, “as the prospect of fresh lockdowns loom, there is always going to be a bit of fear regarding consumption,” said Alex Boughton, a soft commodity broker at Sucden Financial in London
“The direction ahead will be dominated by technicals primarily and thereafter certified stocks remain a sub-story in the background”
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