Arabica Coffee For May Delivery Drops To Near 15-Month Low

Arabica Coffee For May Delivery Drops To Near 15-Month Low
  Mar 06, 2012 May contract settles at lowest point since December 2010  --Stronger dollar encourages selling  --Upcoming Brazil harvest continues to weigh on market  By Alexandra Wexler and Leslie JosephsDOW JONES NEWSWIRES NEW YORK (Dow Jones)--Arabica coffee for May delivery settled at its lowest point since December 2010 as a weaker Brazilian currency and lower robusta prices sparked a flurry of selling.  Arabica for May delivery, the most actively traded coffee contract on the ICE U.S. Futures exchange, fell 4.3% to $1.9305 a pound on Tuesday.  "The market held over $2 [a pound] longer than it ever has, and at some point the support was bound to give way," said Judy Ganes-Chase, president of J. Ganes Consulting. "It's March. Brazil's new crop is just around the corner."  Top coffee producer Brazil is expected to begin harvesting what private and government forecasters expect to be close to a record arabica crop in late April or early May. The 2012-13 harvest in Brazil is an on-year cycle, in which coffee plants yield more beans.  On top of those expectations, the Brazilian real weakened against the dollar Tuesday, giving coffee growers an incentive to sell into the market. Producers will receive more reais for their dollar-priced coffee, said Hernando de la Roche, senior vice president at INTL Hencorp Futures.  As prices slipped, growers in other countries sold, fearing further losses.  "One of the strengths of the market has been a lack of pressure from origin, and it looks like origin selling is behind this," said a major commercial coffee trader. "There is more selling at lower levels than before."  The dollar's strength also weighed on robusta coffee futures traded on London's Liffe. As robusta slid, eventually settling 2.4% lower, speculators in arabica started pulling out of the market.  "The primary support in the arabica market has been the London market" because of a lack of fundamental news, said Jack Scoville, vice president at Price Futures Group.  Scoville says $1.91/lb. is a near-term price target