Coffee slumped on ample US inventories

Source: Dukascopy Bank SA
Farm commodities tumbled on Monday on speculation that expected rains in Argentina will boost crop prospects. Additionally, firmness in the US Dollar and concerns over ample global supplies dragged the commodity complex lower.

Wheat retreated for the third session in a row after the USDA report showed the US wheat exports dropped 32% last week. Pushing wheat futures lower, US Great Plains are expected to face rains that may aid drought-stricken winter wheat.

Corn sagged 0.24% amid record low US exports and improving weather in Argentina. US corn inspected for overseas delivery plunged 75% week on week and 87% on an annual basis last week. Moreover, Argentina may witness long-awaited rains that are likely to boost harvest.

Sugar declined despite speculation global production may fall as farmers are reducing plantings in response to lower sweetener prices.

Coffee was the top-loser amid elevated US inventories. Coffee stocks monitored by ICE Futures US attained almost three-year high of 2.63 million bags on February 1. Putting heavy pressure on coffee futures, Honduras, the top coffee producer in Central America, reported a 56% annual increase in exports in January.
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