Coffee futures fell, heading for the longest slide in more than 11 years, on speculation that wet weather will boost the crop outlook in Brazil, the world’s top grower.
A cold front will bring rain to the entire Brazilian coffee belt from Nov. 2-6, according to Somar Meteorologia. Ample precipitation spurred multiple crop flowerings, while alternating dry periods allowed farmers to apply fertilizers and fungicides, Marco Antonio dos Santos, an agronomist at the Sao Paulo-based forecaster, said today in a telephone interview.
“The weather this season has been perfect,” dos Santos said. “We have everything in place to have output climb close to a record.”
Arabica coffee for December delivery dropped 1.5 percent to $1.075 a pound at 12:32 p.m. on ICE Futures U.S. in New York, after touching $1.07, the lowest for a most-active contract since March 2009. Prices heading for a 10th consecutive decline, the longest slump since January 2002.
Through Oct. 25, futures tumbled 24 percent this year, heading for a third annual loss and the longest slide since 1993.
Brazil’s output may reach as high as 60 million bags next year, Rio de Janeiro-based broker Flavour Coffee said in a report on Oct. 24. That compares with production of 47.5 million bags this season, according to Conab, the government’s crop-forecasting agency. A bag weighs 60 kilograms, or 132 pounds.
Prices may drop to $1 by the end of the year, Kona Haque, a London-based analyst at Macquarie Group, said today in an e-mailed report.
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