Cocoa Jumps to One-Month High as Ghana Trims Output Forecast
Arabica coffee futures climbed for the sixth straight day in New York following renewed concerns over cold weather in top producer Brazil.
Low temperatures are expected to hit Brazil coffee producing regions by the weekend, putting traders on alert after minor damage from isolated frost was seen in the previous week.
While a chance for frost between Sunday, August 18 and Monday, August 19, 2024, can’t be ruled out, the impacts of cold weather will likely be small, Rural Clima meteorologist Marco Antonio dos Santos said Wednesday.
Temperatures are swinging from strong heat to cold in a crucial moment for the development of trees ahead of the upcoming season.
Arabica crops need mild temperatures and regular rainfall during the flowering period that starts in September, but weather has been erratic, with dryness also reported recently.
The most active arabica contract gained as much as 1.4% in New York. Futures are on the longest winning streak since April.
In other soft markets, cocoa futures pared gains after reaching the highest in a month in New York.
While the Ghana Cocoa Board reduced the harvest target at the world’s second-largest supplier, the outlook for a cocoa bean output of 650,000 metric tons is still better when compared to market estimates for the season that is now ending.
Meanwhile, cocoa is trading at $7,697 per metric tonne on the world market.
