Coffee prices surge on dry weather in Brazil
NEW YORK (AP) — Coffee prices rose Wednesday for a seventh straight day on concern that dry weather in Brazil will harm this year's crop.
The price of coffee for March delivery rose 6.85 cents, or 5 percent, to $1.43 a pound. That's the highest price since last May. Coffee prices have climbed 29 percent this year.
The current dryness in central and northeastern Brazil comes at a crucial time for the development of the coffee crop and has already prompted traders to pare back their expectations for this year's crop. Brazil is the world's largest coffee producer, accounting for about a third of global production, according to the International Coffee Organization.
If the dryness persists coffee could climb as high as $2 a pound, said Sterling Smith a commodities analyst at Citigroup. Consumer would likely also start seeing higher prices.
"If prices stay at $1.30 for a further 30 to 60 days then we are going to see prices move up at the store," said Smith.
In trading of other agricultural products, wheat, corn and soybeans all rose.
Wheat for March delivery rose 3 cents, or 0.5 percent, to $5.88 a bushel. Corn for the same month gained 1.5 cents, or 0.3 percent, to $4.43 a bushel. March soybeans rose 3 cents, or 0.2 percent, to $13.16 a bushel.
Most metals also gained.
Gold, silver, platinum and palladium all rose.
April gold rose $5.70, or 0.5 percent, to $1,256.90 an ounce. Silver for March rose 38 cents, or 2 percent, to $19.81 an ounce. Palladium for the same month climbed $7, or 1 percent, to $707.10 an ounce. Platinum for April rose $5.90, or 0.4 percent, to $1,379.30 an ounce.
Copper for March fell 0.3 cents, or 0.1 percent, to $3.19 a pound.
In energy trading, natural gas trading was volatile as the northeastern U.S. endured a second storm of the week. Colder temperatures are expected to follow, increasing demand for heating fuels.
Natural gas for March rose 7 percent to $5.74 per 1,000 cubic feet in morning trading. That appeared to set off some profit-taking, and the price dropped to $4.99 before closing at $5.03, down 34.5 cents, or 6.4 percent, for the day. The price of gas is still up 20 percent since the start of the year.
The price of crude oil for March rose 19 cents, or 0.2 percent, to $97.38 a barrel. Wholesale gasoline for the same month inched up 4 cents, or 1.5 percent, to $2.64 a gallon. Heating oil for March added 1 cent to almost $3 a gallon.