Arabica coffee falls sharply, erasing last week’s gains

Arabica coffee futures on ICE plunged on Monday, erasing the previous week’s gains, on an improving weather outlook in top grower Brazil.

* March arabica coffee settled down 4.15 cents, or 3.9 percent, at $1.0265 per lb.

* Prices were pressured by wetter weather in Brazil, where dry conditions had been threatening crops.

* “Last week was a very positive week for prices; there were lots of talks about drought in Brazil,” said Rodrigo Costa, director of trading at Comexim USA. But rains and improving weather conditions were alleviating some of these concerns, Costa said.

* Prices rose 1.7 percent last week, their sixth consecutive positive weekly finish.

* The run up prompted a pick-up in hedging by Central American producers, dealers said.

* March robusta coffee settled down $26, or 1.7 percent, at $1,508 per tonne.

* Index funds rolling forward long positions out of March into May over the next few days could help to widen the front month’s discount, dealers said

Source:Reuters