Arabica Coffee Gains as Dry Weather Remains in Brazil

  NEW YORK  -  Arabica-coffee futures climbed to fresh two-year highs on Tuesday, buoyed by concerns

that a lack of precipitation in Brazil will continue to damage the crop.

  The worst drought in decades in top-coffee grower and exporter Brazil has pushed the market up 84%

since the start of 2014, as growers and analysts slashed their forecasts for the upcoming harvest.

Additional dry weather could crimp output further, traders and analysts have said.

  "We're only looking more and more into the red every day it stays dry," said Hector Galvan, senior

market strategist at RJO Futures in Chicago, of coffee output from Brazil.

   Arabica coffee for delivery in May on the ICE Futures U.S. exchange was recently 2.1% higher at

$2.0765 a pound, the highest intraday level since Feb. 14, 2012.

  "As long as we hold above $2, that should give people a little bit more incentive to hold their

longs and look at how the market responds to the dry weather" later in the week, Mr. Galvan said.

  In other markets, cotton for delivery in May on ICE was less than 0.1% higher at 91.58 cents a

pound, and raw sugar for delivery in May was 0.2% lower at 18.18 cents a pound. Orange juice for May

delivery was 0.3% lower at $1.5470 a pound.