July arabica coffee (KCN23) on Thursday closed up +9.45 (+5.10%), and July ICE robusta coffee (RMN23) closed up +86 (+3.22%).
Coffee prices Thursday settled sharply higher, with arabica posting a 3-week nearest-futures high and robusta posting a 2-week high. Fund buying fueled a surge in coffee prices Thursday as an El Nino weather event has begun, which could undercut global coffee production. The U.S. Climate Prediction Center said Thursday that sea surface temperatures across the equatorial Pacific Ocean had risen 0.5 degrees Celsius above normal, and wind patterns have changed to the point where El Nino criteria have been met. An El Nino pattern typically brings heavy rains to Brazil and drought to India, negatively impacting coffee crop production.
