Your morning routine got more expensive this week as coffee and orange juice prices leapt higher on a weather scare in Brazil. That South American country is the main source of imported U.S. orange juice and produces 20% of the coffee we consume each day. Unusually cold weather struck Brazil this week, which could damage the orange and coffee crops grown there.
Coffee's price perked up on the cold weather as well as supply concerns in Vietnam, causing the price to soar nearly 13 cents per pound, a 9.5% gain on the week. As of Friday midday, July coffee futures were trading at $1.45 per pound.
Orange juice's rise was not as dramatic as coffee's but it gained strongly as well, with frozen concentrated orange juice futures climbing 7 cents per pound (+5%). The market benefitted from continued hurricane concerns, as many traders are worried that an active hurricane season could damage Florida's sizeable orange crop. As of Friday midday, OJ futures were trading at $1.42 per pound.
Corn Comes Back
After being beaten down to an eight-month low at $3.35 per bushel on Wednesday, July corn futures rebounded to $3.48 on Friday morning, a 4% jump in two days. The main force behind corn's rise was a bullish USDA report released on Thursday morning which showed a decrease in supply nationwide.
Despite the late-week recovery, the corn market remains near its recent lows, as growing weather remains solid throughout the Corn Belt. Traders believe that this year's crop will be large and this belief has been weighing on prices. This year's price action will depend mainly on the weather, ethanol use, and global demand, especially from China.
The copper market had its strongest week in over two months, climbing 12 cents per pound on news that China's economy was growing at a rapid rate. Copper prices had been in a precipitous decline, falling to a two-month low at $2.72/lb on Monday, a 26% crash. Yet this week, the market showed strength, climbing for four straight days to $2.94 on Friday morning, an 8% gain. In the coming months, the market will be shaped by global economic demand as well production figures from nations like Chile, the United States and Peru.