Arabica coffee futures on ICE fell sharply on Monday. The most active contract for May delivery settled down 2.9 cents, or 2.1 percent, at $1.37 per lb, after falling 4.1 percent to $1.3415, holding above last week’s 13-month low of $1.2880 per lb.
A weak real fuelled speculative selling, while rain in Brazil’s growing regions also added pressure. Good rains are expected to continue in the coffee belt during the next 3 to 5 days.
The Brazilian real continued to depreciate, ending 1.96 percent lower than Friday’s settlement. The Colombian peso fell 0.89 percent with respect to the last week’s close.
The latest Commitment of Traders report showed speculative investors have gone net short by 2,112 contracts. Speculative funds haven’t been net short since December 2013
“Visitors to the area are reporting a better-than-expected crop in South of Minas and an expected but limited recovery in Zona da Mata and Parana,” Rabobank said in a market note.
However, Rabobank said that while rains provided some relief, the country could not harvest a bumper coffee crop in 2015/16 because drought had affected tree growth.
