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Coffee Heads for a Bear Market

  • Arabica futures sag 19% from December top; supply concerns ebb
  • Brazil predicts another bumper crop; stockpiles appear ample
A cloth lined with coffee sits during a harvest at a farm in Machado, Brazil.
A cloth lined with coffee sits during a harvest at a farm in Machado, Brazil.Photographer: Victor Moriyama/Bloomberg
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In just a few short weeks, coffee has gone from star performer to teetering on the edge of bear-market territory amid shifting perceptions on supplies in Brazil, the world’s top producer and exporter.

On Friday, arabica beans for March delivery capped a third straight weekly decline to settle at $1.1215 a pound on ICE Futures U.S. in New York. The price has dropped 19% from a December peak, just shy of the 20% threshold that defines a bear market.