Coffee futures were down over 4% Friday as investors engaged in profit taking and lower prices triggered sell-stop orders, reports Alexandra Wexler for the Wall Street Journal.
“There’s no upside, so there’s new speculative selling,” Jack Scoville, a vice president at Price Futures Group, said in the WSJ article. “[Speculators] are closing out more long positions [bets that prices will rise], I suspect.”
Additionally, better weather conditions in Brazil, a major producer of coffee, have also pressured prices.
“It’s a classic weather market,” Shawn Hackett, president of Hackett Financial Advisors, said in the article. “The forecast [in top-producer Brazil]was for two or three weeks of dry weather, but now they’re saying it might rain.”
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Max Chen contributed to this article.