Coffee futures slump as Colombia, Brazil weather aids crops

Coffee futures were down on Monday, as favorable weather in top growers Brazil and Colombia helped ease fears over crop conditions in the South American counties.

On the ICE Futures Exchange, Arabica coffee for March delivery traded at USD2.1905 a pound during European afternoon trade, dropping 1.13%. 

It earlier fell by as much as 1.34% to trade at a daily low of USD2.1772 a pound. 

Agricultural meteorologists called for hot and dry weather conditions in Colombia through next week, which was expected to provide much needed relief after heavy rains throughout most of December damaged coffee plants in the northern part of the country.

Colombian growers usually harvest their main coffee crop from October to December and a smaller crop from April to June. 

Fears over dwindling coffee production in Colombia have helped underline prices in recent weeks.

The National Federation of Coffee Growers of Colombia, or Fedecafe, declined last week to give a firm estimate for next year's crop, saying projections are hard to make given the large amount of rain that came down this winter.

Prices came under additional pressure after Brazil-based weather group Somar Meteorologia said earlier that up to 300 millimeters (11.8 inches) of rain was expected to fall over the next five days in Minas Gerais state, which accounts for nearly half the country's production.

Antonio Alves Pereira, chief agronomist at Minas Gerais' state run crop research agency Epamig said that rainfall has been positive for the state's coffee crops as precipitation was helping replenish soil humidity levels, which were low due to dryness from May through October.

Coffee harvest in Brazil starts in May.

Brazil is the world's largest producer and exporter of Arabica coffee, while Colombia is the world's second largest producer. 

Arabica is grown mainly in Latin America and brewed by specialty companies.

Elsewhere, on the ICE Futures Exchange, cotton futures for March delivery eased up 0.1% to trade at USD 0.9597 a pound, while sugar futures for March delivery slumped 0.7% to trade at USD0.2314 a pound.