COFFEE FUTURES UNDER DLR A POUND AT SIX-YEAR LOW
Coffee futures dipped further and closed
below one dlr a pound for the first time in six years.
    Coffee for delivery in May ended at 99.28 cents a pound on
the New York Coffee, Sugar and Cocoa Exchange, down 0.76 cent
and the lowest price since August, 1981.
     Prices have fallen steadily since the International Coffee
Organization failed in February to reach an agreement
controlling exports by its members, and pressure was renewed
this week as the executive board of the organization met in
London without reopening debate on its export quotas.
    The executive board has limited its current discussions to
administrative matters and is set to adourn Thursday.
    Burdensome supplies have pressed the market down from 1.30
dlrs a pound in February, when the organization's discussions
aimed at re-establishing export quotas broke down.
    Sandra Kaul, a coffee analyst in New York with Shearson
Lehman Brothers, said supplies currently are at their high
point for the year because most producing nations have just
completed their harvests.
    In addition, she said, many of those nations are faced with
serious debt and need to sell coffee to raise capital.
    "This should keep substantial pressure on exporters to
undertake sales despite the drop in prices," she said.
    Further, U.S. demand could be sluggish because winter, the
period of greatest consumption, is ending. Prices could fall
another 10 to 15 cents a pound, analysts said.
    Gold futures retreated from modest early gains and closed
steady while silver prices rallied on the Commodity Exchange in
New York.
    The increase in U.S. banks' prime rates prompted concern
about renewed inflation but the strength of the U.S. dollar
discouraged new buying.
    "The market is getting mixed signals and it doesn't know
which way to go," one analyst said.
    Cattle futures posted new highs on the Chicago Mercantile
Exchange, while live hogs rallied from early losses and frozen
pork bellies finished sharply lower.
    Cattle prices continued to draw support from the winter
storm that swept the Plains states, leaving animals stranded in
snowbound fields and feed lots in miserable condition.
    Live hogs were pressured early by the Agriculture
Department's report Tuesday that producers expanded their
breeding herds more than the market expected last quarter.
Prices recovered to keep pace with higher cash prices.
    Frozen pork bellies fell sharply on the outlook for greater
production and closed with limit losses.
    Soybean futures posted sharp gains on the Chicago Board of
Trade, while corn and wheat were lower.
    Soybeans rallied in response to Tuesday's USDA report that
farmers intend to plant 56.9 mln acres this year, down from
61.5 mln planted last year.
    Corn prices were pressured by the outlook for 67.6 mln
acres of corn, which is down from last year's 76.7 mln acres,
but was larger than analysts expected.
 Reuter
