Newspaper article St Louis Post-Dispatch (MO)

Record Coffee Prices Brewing Highly-Touted Analyst Sounds the Warning

Newspaper article St Louis Post-Dispatch (MO)

Record Coffee Prices Brewing Highly-Touted Analyst Sounds the Warning

Article excerpt

Coffee futures surged 5.4 percent Monday after an analyst's report suggested record prices are possible in the months ahead because of lean inventories and disappointing crops.

Judy Ganes, a senior commodity analyst at Merrill Lynch & Co., said in a daily report after trading Friday that the outlook for prices is "extremely bullish" and "new highs" are likely. The outlook stems from low stockpiles and poor crops, particularly Colombia's, the report said.

Ganes said in an interview Monday that the previous "highs" to which she referred were set in July 1994, when frost ravaged Brazil's crop and drove prices above $2.60 a pound. At least one news service, though, interpreted her report to mean record prices above $3.40 reached in 1977 during another frost in Brazil, the world's largest producer. Ganes' report didn't predict specific prices. Since Ganes correctly predicted in January that coffee prices would rise above $2 a pound, her latest report helped reinforce traders' perceptions that this year's coffee rally may be far from over. …

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