06/05:Coffee Slips on Signs of Ample Brazilian Supply; Cocoa Steady

May 6 (Bloomberg) -- Coffee fell the most in 10 weeks on signs of ample supplies from Brazil, the world’s biggest producer. Cocoa futures were unchanged.

Coffee growers in Brazil will harvest 47 million bags of beans this year, the Agriculture Ministry’s Conab crop- forecasting agency said today in an e-mailed report. That fell within the agency’s January forecast of 45.9 million to 48.7 million bags. Some traders may have expected smaller supplies, said Sterling Smith, an analyst with Country Hedging Inc.

“Conab came out with better-than-expected numbers on Brazilian coffee yields,” Smith said by telephone from St. Paul, Minnesota. “Fundamentally we are looking at more beans in the pipeline, at least from Brazil. That’s not bullish.”

Arabica-coffee futures for July delivery fell 4.1 cents, or 3 percent, to $1.332 a pound on ICE Futures U.S. in New York, the biggest drop for a most-active contract since Feb. 22.

Gains in the dollar also eroded the appeal of commodities including coffee, Smith said. The dollar rose to a one-year high against a basket of six world currencies including the euro, as concern that Greece’s debt crisis will spread in Europe spurred investors to shed riskier assets.

The Reuters/Jefferies CRB Index of 19 raw materials fell as much as 2.2 percent.

Cocoa Declines

In another ICE market, cocoa futures for July delivery were unchanged at $3,203 a metric ton in New York. Earlier, the price fell as much as 1.7 percent. The most-active contract has gained 35 percent in the past year.

In London, cocoa futures for July delivery climbed 32 pounds, or 1.3 percent, to 2,426 pounds ($3,594) a ton on the Liffe exchange. Earlier, the price touched 2,429 pounds, the highest since at least 1989. Robusta-coffee futures for July delivery declined $18, or 1.3 percent, to $1,352 a ton.

Cocoa was “supported in London because of the weaker currency,” Smith said. “In New York we have a stronger currency, so we have a tug of war here in cocoa.”

The pound fell as much as 2.5 percent today against the dollar.

By Whitney McFerron