Coffee jumped to its highest price in more than a year Tuesday, as dry growing conditions continued in Brazil.
Although coffee-growing regions got some rain over the weekend, traders were expecting more. Forecasts suggest that rain levels will remain below average in the coming weeks.
The dry weather is coming at a crucial time for the development of the coffee beans. Even if more rain were to fall, it would be unlikely to improve the harvest, said Sterling Smith, a commodities strategist at Citigroup.
“We’re going to be looking at a couple more weeks of dry to mixed conditions,” said Smith. “For a lot of this coffee, we are past the point of no return.”
Coffee for May delivery climbed 12.6 cents, or 8.8 percent, to $1.55 per pound Tuesday, the highest price since January last year. Coffee has climbed 47 percent in the last three months, making it likely that consumers will soon start to notice higher prices at the store.
In other trading of agricultural products, wheat, soybeans and corn all rose.
Wheat for March delivery climbed 13.50 cents, or 2.3 percent, to $6.12 a bushel. Soybeans for the same month climbed 23.5 cents, or 1.8 percent, to $13.61 a bushel, and corn for March delivery rose 4.25 cents, or 1 percent, to $4.50 a bushel.
In metals trading, gold had its ninth straight gain, closing at the highest level since September. Gold has been getting a boost this month as the dollar has weakened.
Gold for April delivery rose $5.80, or 0.4 percent, to $1,324.50 per ounce.
Silver for March climbed 48 cents, or 2.2 percent, to $21.90 per ounce, and copper for the same month rose 2.1 cents, or 0.6 percent, to $3.29 per pound.
Platinum for April fell $5.60, or 0.4 percent, to $1,424.50 per ounce. Palladium for March dropped 45 cents, or 0.1 percent, to $737.15 per ounce.