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Funds back down from coffee bets on crops weather threat

Monday, December 4, 2017

Too much rain in Colombia, and too little in Brazil. South American coffee crops are suffering from a confluence of extremes, signalling tighter supplies than expected.

The adverse weather is shaking the confidence of hedge funds, who less than a month ago held a record wager that arabica coffee futures would fall. Instead, prices have posted two straight weekly gains, reaching a two-month high on November 30.

Bountiful harvests for producers in Central America, led by Honduras, can help make up for South American declines.

Source: Bloomberg