Coffee prices shot up as much as 10 percent Thursday because of tighter supplies of arabica beans, but analysts say the constraints may be temporary.
Coffee for September delivery rose $8.25, or 5.1 percent, to settle at $168.75 a pound after climbing as high as $176.50 a pound earlier in the day, the highest level in two years.
Coffee prices have risen about 22 percent this month after cold weather initially threatened Brazil's harvest and the Colombian crop.
Those fears have been allayed but supplies have been tighter because the highest quality of arabica beans is not reaching the market as quickly as anticipated, according to Spencer Patton, founder and chief investment officer for hedge fund Steel Vine Investments LLC.
"Prices have been rising to try and convince farmers to sell," he said. "But we've seen farmers showing quite a bit of discipline."
Lind-Waldock market strategist Tom Mikulski said he expects the supply to eventually exceed demand based on global production estimates.
"We're still looking at a huge crop coming from Brazil and world production looks pretty good," he said. "Colombia's production is looking to be better for the second half of the year."
In other commodities trading, metals, grains and energy prices were mixed on disappointing economic news that added to concerns about the recovery.
Although the Labor Department said initial claims for unemployment benefits fell last week, the total remained above levels that would indicate improved hiring.
A separate report showed orders for durable goods fell last month for the first time in six months, due primarily to transportation orders.
Among the industrial metals for September delivery, copper rose 6.95 cents to settle at $3.0240 a pound; silver added 27.2 cents to $18.776 an ounce and palladium fell $4.35 to settle at $470 an ounce. Platinum for July delivery lost $5.50 to $1,561.50 an ounce.
August gold gained $11.10 to $1,245.90 an ounce.
Benchmark crude for August delivery added 16 cents to settle at $76.51 a barrel on the New York Mercantile Exchange.
In other Nymex trading in July contracts, heating oil fell 1.12 cents to settle at $2.0572 a gallon, natural gas lost 5.6 cents to settle at $4.748 per 1,000 cubic feet. Gasoline rose 1.12 cents to settle at $2.0935 a gallon.
Wheat for September delivery rose 1.75 cents $4.775, while corn fell 1.75 cents to $3.5375 a bushel. July soybeans fell 2.5 cents to settle at $9.5550 a bushel.
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