COMMODITIES : Coffee Futures Prices Fall as Speculators Flee Market

Prices of coffee futures prices Wednesday on New York’s Coffee, Sugar & Cocoa Exchange as speculators, spooked by weakening technical signals, resumed their flight from the market.

On other markets, grains and soybeans declined, livestock and meat were mostly lower, precious metal futures were down slightly and stock index futures advanced.

Most coffee futures declined 6 cents a pound, the permitted limit for daily trading. The limitless contract for delivery in March settled 11.67 cents lower amid heavy volume at $1.3881 a pound, a four-week low.

“The coffee market obviously crashed,” said Arthur Stevenson, an analyst with Prudential-Bache Securities Inc. in New York. “We had a literal avalanche.”

But analysts could point to no new supply and demand developments that might have precipitated the collapse. Instead, they said, the barrage of sell orders was triggered by the market’s decline through successive “sell stops,” which are price levels at which speculators had previously decided they would sell.

Selling rapidly accelerated as the March contract’s price approached $1.43 a pound, Stevenson said.

Recent Rains

Coffee futures have been in a downward trend since Jan. 3, the first trading session of the new year, when March coffee reached a 27-month high of $1.669 a pound on bullish supply and demand factors.

Analysts said those factors, which include drought damage to Brazil’s coffee crop and strong seasonal demand, have not changed, although recent rains in Brazil may have halted damage

Grain and soybean futures finished moderately lower on the Chicago Board of Trade in a late selloff linked to increasingly bearish expectations for Friday’s Agriculture Department crop report.

The report, scheduled for release after Friday’s close of trading, will contain the government’s final 1988 crop production totals, new estimates of the nation’s grain and soybean stockpiles, projections for 1989 corn and soybean plantings and an actual tally of the 1988-89 winter wheat acreage.

Pork Futures Fall

Analysts said they expected the report to show winter wheat seedings to be more than 15% above the previous year. The 1988 corn and soybean production totals are expected to be higher than the last USDA estimate.

Wheat settled 1 cent to 3.25 cents lower, with March at $4.445 a bushel; corn was 0.25 cent to 2.75 cents lower, with March at $2.8675; oats were 0.75 cent to 3 cents lower, with March at $2.36 a bushel, and soybeans were 3.50 to 7 cents lower, with January at $7.975.

On the Chicago Mercantile Exchange, cattle futures finished mixed in technically inspired trading while pork futures fell amid bearish fundamental factors.

Most gold and silver futures drifted lower in lackluster trading on the Commodity Exchange.

Gold settled 30 to 40 cents lower, with February at $405.20 an ounce; silver was 0.1 cent lower to 0.5 cent higher, with March at $5.995.

Stock index futures posted moderate gains on the Chicago Mercantile Exchange, where the contract for March delivery of Standard & Poor’s 500 index settled 1.20 points higher at 284.40. Each point is worth $500.

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