COMMODITIES : Coffee Plunges as Market Anticipates Brazilian Glut

Coffee futures prices fell drastically Tuesday on the Coffee, Sugar & Cocoa Exchange in New York.

The March contract dropped 634 points, or 6.34 cents, during the trading session.

“It was a blood bath,” said Bert Ruiz, a broker in New York with Balfour Maclaine Corp. “The decline was due to the anticipation of a greater availability of coffee from Brazil. The market will be flooded with Brazilian coffee, due to the government’s economic austerity plan introduced last week.”

Because of new warehouse fees, Brazilian coffee exporters have had to unload their coffee onto the world market, Ruiz said.

Futures prices have been rising since early December but have leveled off since a March contract high of $1.66.90 on Jan. 3.

Coffee settled 5.70 cents to 6.34 cents lower, with the contract for delivery in March at $1.3451.

Futures prices of soybeans and corn climbed higher while wheat prices sank at the close on the Chicago Board of Trade.

Soybeans advanced more than 11 cents for the March spot contract.

“A rumor that the Russians bought 600,000 tons of soy pellets from Brazil or the United States supported the beans, and corn went along for the ride,” said Victor Lespinasse, a trader with Dean Witter Reynolds Inc.

Wheat Prices Slump

Weighing on wheat prices were a forecast of rain in the Great Plains growing area and talk that Agriculture Secretary-designate Clayton K. Yeutter “isn’t too keen on export bonuses,” Lespinasse said.

At the close, wheat was 4.25 cents to 7 cents lower, with the contract for delivery in March at $4.37.75 a bushel; corn was 2 cents to 3.25 cents higher, with March at $2.72.25 a bushel; oats were 0.75 cent to 2 cents lower, with March at $2.3525 a bushel, and soybeans were 5.25 cents to 12 cents higher, with March at $7.675 a bushel.

Futures prices of livestock and meat finished mixed to mostly lower after drifting higher most of the day on the Chicago Mercantile Exchange.

The market dipped in anticipation of an Agriculture Department cold storage report showing record inventories of frozen pork bellies, said Chuck Levitt, livestock analyst for Shearson Lehman Hutton Inc.

While the report--released after the closing bell--had 113.3 million pork bellies on hand Dec. 31, the largest number ever for that date, it was still 7 million less than expected, Levitt said.

Live cattle prices, supported by packer demand, were mixed, he said.

Live cattle settled 0.27 cent lower to 0.30 cent higher, with the contract for delivery in February at 72.82 cents a pound; feeder cattle were 0.17 cent lower to 0.30 cent higher, with January at 83.55 cents a pound; live hogs were 0.20 cent lower to 0.10 cent higher, with February at 43.12 cents a pound, and frozen pork bellies were 0.55 cent lower to 0.20 cent higher, with February at 39.15 cents a pound.

Precious Metals Drop

Gold and silver prices tumbled on the Commodity Exchange in New York.

Gold settled $1.80 to $2.90 lower, with the contract for delivery in January at $406.30 an ounce; silver was 6.4 cents to 7.1 cents lower, with January at $6.13 an ounce.