Coffee climbs after ICO comments

Source: Dukascopy Bank SA
© Scanpix/Reuters
Rural commodities were mixed on Tuesday with softs moving higher and grains declining. Softer greenback was supportive for the commodity group. At the same time, USDA World Supply and Demand report sent grains lower. Meanwhile, the International Coffee Organization comments boosted coffee prices.

Wheat was the top-loser after the USDA raised global production estimate to the high end of market consensus, citing increases in China's and Australia's output. USDA also lifted the world's inventory estimate by 1.6%.

Corn sank despite USDA report being not bearish on the commodity. USDA maintained its forecast for domestic stocks. However, falling demand for US supplies makes future upward revisions possible, experts claim.

Sugar inched up despite weak fundamentals. An upgrade of Brazilian Centre South cane crushing forecasts continued to weight on the sweetener.

Coffee was bullish after the International Coffee Organization slashed its global coffee harvest estimates by one million bags to 146 million bags in 2012-13 marketing year. However, coffee output still is expected to rise significantly by annualized 8.4% in 2012-13.


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