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Barchart
Barchart
Rich Asplund

Coffee Prices Surge on Brazil Dryness and Brazilian Real Strength

March arabica coffee (KCH26) on Tuesday closed up +14.50 (+4.04%).  March ICE robusta coffee (RMH26) closed up +89 (+2.27%).

Coffee prices rallied sharply on Tuesday, with arabica posting a 4-week high.  Below-average rainfall in Brazil, the world's largest arabica producer, is supporting arabica coffee.  Somar Meteorologia reported Monday that Brazil's largest arabica coffee-growing area, Minas Gerais, received 47.9 mm of rain during the week ended January 2, or 67% of the historical average.   Also, strength in the Brazilian real is supportive for arabica coffee.  The real (^USDBRL) rallied to a 1-month high against the dollar on Tuesday, discouraging export sales from Brazil's coffee producers.

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