Coffee turns lower despite lingering frost fears in Brazil
Coffee prices fell on Thursday, despite the US dollar's drop against most currencies, and lingering concerns over the cold weather in Brazil.
The Brazilian Public Food Commissariat reported last week that there were frost waves that affected 150,000 to 200,000 hectares, or about 11% of the country's coffee-grown areas in the country.
Coffee traders said that this is the first time since 1994 that Brazil has experienced such bad weather, which foreshadows several other upcoming frost waves.
The dollar index fell against a basket of major currencies by 0.3% to 92 points as of 13:29 GMT, after hitting a high of 92.2 points and a low of 91.9 points.
As of 13:30 GMT, coffee spot prices fell 1.7% to $1.97 a pound, after last week's 20% gain.
US unemployment claims worse than expected
At 12:30 GMT, the US Department of Labor showed that the unemployment claims were at 400K during the week ending in July 23, worse than forecasts of 382K, but better than the previous reading of 424K. This data is negative for the US dollar.
US economy grows less than expected in Q2
At 12:30 GMT, the US economy released the first reading of the GDP for the second quarter of 2021, which showed a growth by 6.5%, worse than forecasts of 8.5%, while the US economy grew by 6.4% during the first quarter. This data is negative for the US dollar.
Oil jumps to 2-week high after US inventories drop
Oil prices as the US market opened on Thursday, extending gains for the second straight day and hit a 2-week high as fears over the US oversupply eased after a large drop in the US crude inventories and a slowdown in US oil production.
US crude rose 1.2% to the highest since July 14 at $73.25 a barrel, after opening at $72.38, and hit a low at $72.29, and Brent crude rose 1.1% to a 2-week high at $75.53 a barrel, after opening at $74.76, and hit a low at $74.62.
The US crude gained 0.7% yesterday, and Brent crude rose 0.2%, following the EIA's weekly report.
The Energy Information Administration reported yesterday that the US crude inventories fell 4.1 million barrels during the week ending on July 23, while analysts forecasts a drop by 2.6 million barrels.
The total commercial inventories fell to the lowest level since the week ending on January 31, 2020 at 435.58 million barrels, in a positive sign of the US demand levels.
While the US output fell 200,000 barrels last week, with the total at the lowest level since the week ending on June 25 of 11.2 million barrels per day.