Arabica Coffee Futures Soar on Investor Short-Covering

Arabica Coffee Futures Soar on Investor Short-Covering  
 By Alexandra Wexler   
 NEW YORK--Arabica coffee on the ICE Futures U.S. exchange surged Tuesday asinvestors who had bet on falling prices covered their positions after it lookedlike a bottom had been formed in the market.   Front-month arabica futures have fallen 28% this year as expectations of arecord crop from top-coffee producer Brazil weighed on the market.   "This market was due for a bounce," said Boyd Cruel, senior analyst at VisionFinancial Markets. "We're finding support right around that $1.50-level, whichled to this short-covering rally."   Front-month ICE arabica for July delivery was 3.6% higher at $1.6440 a poundin thin late-morning trade Tuesday, while the more-actively traded contract forSeptember delivery was 3.6% higher at $1.6450 a pound. Earlier, prices forfutures in the September contract climbed to $1.6570 a pound, a high since May30.   Brazil's harvest has been slowed by an onslaught of rain in coffee-growingregions, which has made it difficult to harvest and dry the beans, said JackScoville, vice president at Price Futures Group.   "Rain has stopped in coffee areas of Brazil, but producer reports from(coffee-growing region) Minas Gerais say that the harvest remains slow atbest," Mr. Scoville added.   However, prospects of a massive supply from Brazil should still cap therally, traders said.   "Even after we see this correction, I think we're going to get one more legdown," Mr. Cruel added.