Coffee futures rose, heading for the biggest increase in four months, on speculation that supplies will be limited by government price supports in Brazil, the world’s top producer.
Brazil will announce today a guaranteed minimum price at which the government would buy beans from farmers, after arabica-coffee futures fell to a 33-month low in March. In the week ended April 23, money managers and other large speculators reduced their net-short position, or bets on a drop in prices, by 32 percent, U.S. government data show.
The Brazil announcement will “just keep supplies from hammering the market,” Jack Scoville, a vice president for Price Futures Group, said in a telephone interview from Chicago. “At least for today, we’re getting some relief to the upside.”
Arabica coffee for July delivery rose 3.5 percent to $1.3935 at 11:32 a.m. on ICE Futures U.S. in New York, heading for the biggest increase for the most-active contract since Jan. 2.
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