Arabica climbs to one-month high on dryness in Brazil

Coffee prices Monday settled moderately higher, with arabica posting a 1-1/4 month high.  Excessive dryness in Brazil sparked some fund buying of arabica coffee Monday after Somar Meteorologia reported that rainfall in the Minas Gerais area, which accounts for about 30% of Brazil's arabica crop, was 15.5 mm last week, or only 77% of the historical average.

Also, concern about tighter global supplies is supportive of coffee prices.  Colombia, the world's second-biggest arabica producer, reported last Tuesday that its March coffee production fell -by 13% y/y to 914,000 bags.  Also, the International Coffee Organization (ICO) on March 31 reported that global coffee exports during Oct-Feb fell -0.8% y/y to 53.2 mln bags.

Arabica coffee has support from strength in the Brazilian real  which rose to a 2-year high against the dollar last Tuesday.  A stronger real discourages export selling by Brazil's coffee producers.