Coffee prices have climbed for seven consecutive days, rising nearly sixteen cents per pound (+12 percent).
Much of the rally has been driven by weather in Brazil, the source of one-third of the world’s coffee. The approaching Southern Hemisphere winter dropped temperatures into the 30s in Brazil’s largest coffee-growing region.
Though rare, freezing temperatures can damage coffee trees, reducing production. The threat of cold weather and ongoing concerns about a leaf fungus prevalent in Central American coffee growing regions had the market jittery enough to push prices to a two-month high.
Some coffee traders are waiting to see if the market can perk up over $1.50 per pound, which may prompt another rush of buying. As of midday Friday, coffee for delivery in July was worth $1.46 per pound.
Corn Crushed Lower
Weather across the Corn Belt began to break this week, allowing farmers to start planting corn in earnest, catching up significantly. Some analysts are projecting that as much as a quarter of this year’s corn crop was planted during the last week. Although still behind pace, the fast planting increased the chances that U.S. farmers will plant a record corn crop this year.
In addition to the optimistic weather outlook, corn prices were pulled lower by a USDA Report released Friday morning. That report showed increases in corn production from Brazil and Argentina, two major suppliers who compete with American farmers for export business.
Following the report, July corn prices fell as low as $6.25 per bushel, the lowest price in two weeks.
The Japanese yen is worth less than one U.S. cent for the first time in more than three years. The Japanese currency has been in a near freefall in recent months due to the actions taken by the Bank of Japan to stimulate the Japanese economy, which has been stagnant for nearly two decades.