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Strategies & Market Trends : Commodities - The Coming Bull Market -- Ignore unavailable to you. Want to Upgrade?

To: craig crawford who wrote (449)	7/6/2001 2:28:41 PM
From: craig crawford	Read Replies (1) \| Respond to of 1643

July 6, 2001 Coffee Prices Drop as Forecasts Predict Large Crop in Brazil interactive.wsj.com By PETER A. MCKAY Staff Reporter of THE WALL STREET JOURNAL NEW YORK -- Coffee prices continued to slide as expectations grew that the Brazilian crop being harvested will be larger than expected. The price of the nearby September contract fell 2.18%, or 1.25 cents, to 56 cents a pound on the Coffee, Sugar & Cocoa Exchange. The contract has fallen more than 16% since the beginning of May. ........................................................................................................................ Among the bad news for coffee traders has been the faltering Brazilian real, which encourages producers to raise their output to keep exports high and valuable foreign currency coming in. Ms. Ganes also noted that big speculative investors have been betting aggressively that prices will fall, creating a mammoth "short" position that is hard for other traders to go against. These short positions total more than 18,500 contracts, almost a third of all outstanding positions at the coffee exchange, a division of the New York Board of Trade. Only five times since 1983, when funds became significant players in the coffee market, have such short positions totaled more than 30% of open interest, Ms. Ganes said. Also weighing down coffee prices in New York has been weakness on the London International Financial Futures & Options Exchange, where a different grade of coffee trades, creating the opportunity to take advantage of the difference in prices between the two exchanges. In London, expectations of strong production from Vietnam and the rest of Asia have dragged down prices, just as Brazil's crop news has hit prices in New York, said analyst Mike MacDougall, of New York trading firm Fimat USA Inc. "It looks like the market in New York is going to test the 50-cent level," he said. Coffee's all-time low is 48 cents a pound, reached in 1992 at the coffee exchange in New York