Subject:  Commodities-Frost-free coffee falls, oil rises |
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juan valdez
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Date Posted: 22:37:49 05/27/03 Tue
Commodities-Frost-free coffee falls, oil rises
Reuters, 05.27.03, 5:15 PM ET
CHICAGO (Reuters) - U.S. coffee prices tumbled on Tuesday as funds and speculators bailed out of the market on forecasts that top-grower Brazil would be free of any crop-killing frost this week.
Crude oil futures rose to five-week highs on tight U.S. stocks and the prospect of OPEC producers cutting output, while gold retreated from 15-week highs as the stock market rallied.
CSCE coffee futures fell to 5-1/2 week lows on forecasts for frost-free weather in Brazil's growing regions.
"(There was) Long liquidation by funds and speculators after news of no weather (problems) in Brazil," a dealer said.
Early last week, meteorologists in Brazil had said there was a risk of light frost on Monday, but local growers said they saw no evidence of frost in the key areas.
The futures markets in New York were closed on Monday for the Memorial Day holiday.
Frosts are rare in May, but fears of cold weather damaging the crop rise sharply in June and July.
Traders said frost fears drove prices sharply higher last week, but those concerns had dissipated on Tuesday amid the forecasts for mild weather.
Meteorlogix weather service called for dry conditions for the next five days in Brazil's coffee region. Near to below normal temperatures were expected, but the service did not foresee any freezing weather.
It added that favorable harvest conditions were also expected this week, after scattered showers disrupted the coffee harvest last week.
CSCE July coffee ended 4.50 cents lower at 61.15 cents a pound.
NYMEX crude oil futures bounced back to finish higher amid tight U.S. stocks and a renewed pledge from Saudi Arabia to cut back output in June to meet its OPEC-set production quota.
The OPEC cartel is set to consider output quotas in Qatar on June 11. OPEC's policy will have to take into account the prospect of rising exports from Iraq which wants to resume its place in OPEC's production and market share quota system.
Officials in postwar Iraq have said they hoped to resume exports, stalled since the U.S.-led military attack in March, in two or three weeks, with total production of 1.3 million to 1.5 million barrels per day by mid-June.
Traders said the late-session bounce in crude oil futures was not linked to a new earthquake in OPEC-member Algeria, where 2,200 people were killed in a quake last Wednesday.
State radio said several buildings collapsed at two towns along a Mediterranean coastal strip to the east of the capital Algiers that was hit hard by last week's quake.
Meanwhile, U.S. fuel inventory data from both the government and industry will be released on Thursday, delayed a day by the Memorial Day holiday.
NYMEX July crude oil ended 19 cents higher at $29.35 a barrel. June gasoline was down 1.13 cents at 89.52 cents a gallon, while June heating oil was up 0.20 at 74.60 cents.
Comex gold futures were lower as U.S. economic data helped to boost the stock market and steady the U.S. dollar.
"Equities rallied, the euro came off and we saw some decent profit taking from some strong longs," said Robert Gottlieb, head of bullion dealing at HSBC. "On a long-term basis, I don't think anything's changed, but we've had a huge rally."
The dollar's plunge this year against the euro helped lift gold to a 6-1/2 year high at $391.70 on Feb. 4, when panicky financial markets were also buying safe havens before the U.S. went to war in Iraq.
"The market may be nearing the end of its tether," wrote analyst Timothy Evans at IFR/Pegasus. "This does suggest that the market's easiest gains are behind it and that a topping pattern may now begin to form."
Comex June gold ended $1.00 lower at $367.80 an ounce.
Copyright 2003, Reuters News Service
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