(Bloomberg) -- Arabica coffee futures halted a six-day rally on reduced risk of frost in top-grower Brazil and amid market volatility as the front-month contract heads into its delivery period.
The most-active arabica contract fell as much as 3.3% in New York, snapping it’s longest streak of gains since April.
A correction in prices is “natural” as the latest forecast shows that cold weather over the weekend won’t bring frost to coffee areas, said Fernando Maximiliano, a StoneX analyst. Still, market volatility is set to continue, with traders also fearing that recent dryness could hurt prospects for the coming season, he added.
This Thursday is also the first notice day, when traders can declare their intention to take physical delivery. A spread commanded by September futures over December widened, which typically indicates good demand for short-term supplies.
--With assistance from Ilena Peng.
©2024 Bloomberg L.P.
