(Bloomberg) — Coffee futures led soft commodities lower on Friday, with arabica set for its first weekly loss since October.
The most-active arabica ICE contract dropped as much as 1.8% to $235.95 a pound while robusta fell as much as 1%. Arabica is heading lower for the week despite rising to the highest level in a decade on Monday, after Brazil’s coffee shipments declined 37% in November compared with a year earlier.
Droughts and frosts this year have severely damaged the coffee crop in the South American country which is the world’s top grower. Traders continue to watch for how big an impact that and the worldwide shipping malaise will have on the global market.
ABN-AMRO analysts said Thursday that outperforming commodities such as coffee are being sold off ahead of re-weighting of indexes such as BCOM and GSCI at the end of the year.
Most softs barring cotton were also trading lower on Friday. Analysts at Fitch Solutions said in a note that they expect prices of most agricultural commodities to fall next year, albeit remaining at relatively elevated levels.
“In general, we think that global agricultural production will increase over the coming year owing to high plantings incentivized by high prevailing prices for much of 2021 but also because the weather has been more favorable,” they said in a note.
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