Coffee Climbs in New York as Stockpiles Decline; Cocoa Advances

Coffee futures rose in New York, heading for the first weekly gain since last month, as inventories slid to lowest amount in seven years. Cocoa prices increased.

Coffee stockpiles fell 1.2 percent to 2.7 million bags on March 9 in warehouses monitored by ICE Futures U.S., the biggest drop since Feb. 2. Futures traded in New York have jumped 25 percent in the past year as global supplies tightened.

Coffee prices “should see a pop higher,” said Byron Barrios, an East Coast Options Services trader in New York. The “low” level of warehouse stockpiles is “basically providing support” to futures prices, he said.

Arabica-coffee futures for May delivery rose 1 cent, or 0.8 percent, to $1.3375 a pound on ICE in New York. Earlier, the price climbed as much as 0.9 percent.

The coffee market was also “a bit oversold technically,” Barrios said. Prices have fallen 11 percent from a 15-month high of $1.495 on Dec. 16.

“Just from a technical standpoint, we’re kind of consolidating sideways here,” said John Caruso, a senior market strategist at Lind-Waldock in Chicago. The market will likely “chop sideways to possibly higher here in the next few trading sessions,” he said.

Also on ICE, cocoa futures for May delivery climbed $10, or 0.4 percent, to $2,854 a metric ton. Cocoa has gained 22 percent in the past 12 months.

By Elizabeth Campbell
Source: Bloomberg