Arabica-Coffee Ends at Highest Since January 2012; Cocoa Rebounds

  NEW YORK  -  Arabica-coffee futures settled at a more than two-and-a-half-year-high Tuesday as

continued dry weather fueled concerns over top producer Brazil's next crop.

  Arabica for December on ICE Futures U.S. gained 1.7% to end at $2.2190 a pound, the highest

settlement for the most actively-traded contract since Jan. 20, 2012.

  A severe drought earlier this year crimped output this season in Brazil, the world's top arabica

supplier, according to government estimates. But a lack of rainfall in recent weeks has sparked

worries over whether already weakened trees will produce even less coffee next year.

  Most of the month has been dry for Brazil's main coffee-growing region and rains aren't expected

to hit until next week, according to Sao Paulo-based forecaster Somar Meteorologia.

  The global 2014-15 coffee season, which began Oct. 1, "will likely result in a global deficit next

year," due to lower production, the International Coffee Organization said in a report this week.

  "If it doesn't rain until the end of the month it's going to be a problem," said Rodrigo Costa, an

analyst and a director at New York brokerage Newedge.

  Cocoa for December rose 1.4% to end at $3,102 a ton, despite a sign of lower demand from top

chocolate consumer Europe.

  Europe's third-quarter cocoa grindings fell 1.1% on the year to 327,866 metric tons, figures from

the Brussels-based European Cocoa Association showed Tuesday. The figures, which measure the weight

of cocoa beans processed, are regarded as a proxy for chocolate demand.

  But concerns that Ebola will spread throughout West Africa, which supplies more than two-thirds of

the world's cocoa beans, and hurt the harvest and transport of the raw chocolate ingredient,

encouraged buying, brokers said.

  The World Health Organization said Tuesday that as many as 10,000 new cases a week could be

reported by early December.

  "That created some knee-jerk buying," said Jack Scoville, a vice president at Chicago brokerage

Price Futures Group. "If it does get worse, the market could be effected. Maybe you'll have to have

less Easter chocolate."

Orange-juice concentrate for November ended 0.8% at $1.3425 a pound.

  Raw sugar for March gained 0.8% to settle at 16.81 cents a pound, while cotton for December fell

1.3% to 64.16 cents a pound.