Arabica-Coffee Futures Tumble to 4 1/2-Year Low

Alexandra Wexler

  NEW YORK  -  Arabica-coffee futures prices tumbled to their lowest level since

March 2009 on Tuesday as forecasts for rain in No. 1 grower Brazil boosted the

outlook for next year's crop.

  Arabica coffee for delivery in December on the ICE Futures U.S. exchange was

recently down 4% at $1.1445 a pound.

  Brazil, the source of around one-third of the world's coffee, is wrapping up

its current harvest. Rains are now needed to nourish the next arabica crop,

which farmers will start picking in mid-2014.

  In addition, traders and analysts said the market's failure to rise much

above the key technical and psychological level of $1.20 a pound during the

last four sessions has prompted speculative investors to add bets that prices

will fall further.

  "When we were unable to break above that level, the market just kind of

folded due to the abundant supplies in the short term," said Boyd Cruel, senior

analyst at Vision Financial Markets in Chicago.

  Expectations for a record "off-year" coffee harvest in Brazil's two-year crop

cycle have weighed on the market this season. Mr. Cruel said futures could

trade as low as $1.10 a pound before finding support.

  "We're still trying to find a harvest low in here," said Fain Shaffer,

president of Infinity Trading Corp., an Indianapolis-based brokerage.