Arabica Coffee May Drop to $1/lb on Brazil Prospects
BY Marvin G. Perez
Price could reach that level by 3Q when Brazil wraps 2017-18 harvest, James Cordier, founder of Optionsellers.com in Tampa, Fla. says in telephone interview* Ample stockpiles, potential for record Brazil crop next year adds to bearish sentiment
* “Coffee is going to face a incredible challenge sustaining any rally” as Brazilian producers try to “cash in as fast as they can on the weaker real”
** Currency drop also encouraging producers to boost output
* U.S. green-coffee stockpiles at highest since 1994 shows there’s “nothing bullish”
* NOTE: Arabica coffee down 11% this year to $1.2205 on ICEFutures U.S.
* Crude oil slump also signals commodity price deflation at a time U.S. Fed is raising rates, damping speculator demand for raw materials