Commodities Friday Aug. 22, 1986 : Coffee Futures Perk Up

Coffee futures leaped upward on a report of further cutbacks in the Brazilian crop.

Most contracts gained the 4-cents-a-pound limit for daily trading on the Coffee, Sugar and Cocoa Exchange in New York. The two nearby deliveries, on which there are no limits, were up more than twice that amount.

The Brazilian Coffee Institute estimated the 1986-87 crop at 11.2 million 132-pound bags, down from an earlier estimate of 14.7 million. The drought-damaged crop is far below the 30 million bags produced last season in Brazil, the world’s No. 1 producer.

“Prices came up toward the $2 (a pound) resistance level and stalled,” said Sandra Kaul, analyst with Shearson Lehman Bros.

“This is going to be a critical juncture,” she said, adding that if prices break through $2 next week, roasters will be forced to come in and do some buying, furthering the up-trend.

Precious metals futures went into a decline, with platinum losing more than $11 an ounce after two days of strong rallies.

Prices opened better and hit contract highs, but traders sensed that platinum was not going to break through the $600 resistance level, said Bette Raptopoulous, an analyst with Prudential-Bache Securities.