Arabica coffee prices sharply down
Michael Chen
Senior Web Developer
Arabica coffee futures on ICE fell sharply on Monday, weighed by a fresh wave of largely speculative selling as prices headed back down towards last week's 13-month low.
Dealers said the recent fall in arabica coffee futures had been fuelled largely by speculative selling driven both by technical factors and rains in Brazil, which improved the outlook for crops in some areas.
May arabica coffee on ICE was off 4.95 cents, or 3.5 percent, at $1.3495 per lb at 1545 GMT. The second month fell to a 13-month low of $1.2880 per lb last week.
Speculators switched to a net short position in arabica coffee contracts on ICE Futures U.S. for the first time in more than a year in the week to March 3, U.S. Commodity Futures Trading Commission data showed on Friday.
Some argued that the fall in prices had been overdone.
"We expect coffee prices to climb back to $1.50. A tsunami of speculative selling in the futures market cannot quench the world's thirst for coffee," Rabobank said in a market note.
Rabobank said Brazil could not harvest a bumper crop in 2015/16 because drought had affected the tree growth. However, recent rain has provided some relief.
"Visitors to the area are reporting a better than expected crop in South of Minas and an expected but limited recovery in Zona da Mata and Parana," Rabobank said.
May robusta coffee futures on ICE were down $12, or 0.6 percent, at $1,869 a tonne.
Source: brecorder.com/markets/commodities/europe/230889-arabica-coffee-prices-sharply-down-sugar-and-cocoa-also-lower.html
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