COFFEE AND COCOA FORECAST FOR TODAY AND YESTERDAY'S MARKET CLOSE REVIEW

    NEW YORK, March 17, 2011 - Arabica coffee futures closed higher Wednesday as the market staged a modest rebound after a selling spree sparked by the nuclear plant emergency in Japan which was already reeling from a killerquake and tsunami.

    But cocoa futures were hit by late investor selling to close near an eight-week low.

    COFFEE

    * May arabica coffee futures <KCc2> increased 2.40 cents toconclude at $2.6535 per lb.

Brazil further curtails foreign land purchases

BRASILIA, March 17, 2011 - Brazil has closed a legal loophole used by foreigners to buy farm land, a change of rules that is fueling uncertainty among agricultural investors in one of the world's leading food exporters.

"We simply applied the law," Attorney-General Luis Inacio Adams told Reuters on Wednesday. "Foreigners can buy land up to a certain limit and they can create (minority) partnerships with Brazilians."

-Kenya to reintroduce robusta coffee variety

NAIROBI, March 17, 2011 - Kenya is poised to reintroduce robusta coffee this year in areas that do not normally grow the commodity, and possibly build a factory to process the beans once volumes are substantial, the country's regulator said.

East Africa's biggest economy stopped producing the bean variety almost three decades ago after production plummeted when farmers cut back growing of robusta due to low earnings compared with the arabica variety for which Kenya is renowned.

Liffee Cocoa tumble in commodities sell-off

* Liffe May robusta coffee ends down $15 at $2,375 a tonne. Prices slide along with other commodity markets after a  huge earthquake and tsunami struck Japan.
 

* Liffe May cocoa ends down 63 pounds at 2,121 pounds a tonne, caught up in the sell-off in commodities. *********

COFFEE FORECAST TODAY & Yesterday's MARKET CLOSE REVIEW

NEW YORK, March 15 (Reuters) - Soft commodities trading on ICE Futures U.S. tumbled across the board Tuesday on continued risk aversion as thethird biggest consumer Japan's nuclear crisis grew.

Arabica futures closed down for the fourth straight day at a one-month low, falling further from last week's 34-year high. Raw sugar closed down 7.7 percent at a 5-month low and cocoa finished at the lowest level in 5 weeks.

COFFEE
* May arabica coffee futures tumbled to close down 10.35 cents,  or 3.8 percent, at $2.6295 per lb, its lowest settlement since Feb. 16.
 

* Market tumbled in heavy volume, as risk aversion hit the commodity  complex - traders.
 

* Market viewed as due for a correction lower, after hitting a 34-year  high last week at $2.9665 per lb, basis second position - traders.
 

* If May closes below $2.60 will indicate an end to the recent uptrend  - traders.
 

* Tight global supplies of washed arabica beans continue to be seen as  a bullish factor and underpinning support - traders.
 

* Coffee stocks, already at the lowest levels since the International  Coffee Organization began keeping records in 1965, may fall further - ICO  Chief Economist Denis Seudieu.
 

COCOA
* Benchmark May cocoa futures sank $134, or 4 percent, to close  at $3,255, the lowest settlement since Feb. 7.
 

* May narrowed significantly to close at a $9 premium to July ,  from $30 the previous session.
 

* Market tumbled in heavy volume on pressure from the macroeconomic  picture that caused long liquidation across the commodity complex -  traders.
 

* A closely followed, independent analyst released a global supply  report projecting a huge global supply surplus of nearly 200,000 tonnes, may have added additional pressure - dealers.
 

* Gunmen shot dead four people near a roadblock run by youth supporters
of Ivory Coast's Laurent Gbagbo in the Abidjan suburb of Deux Plateau -  witnesses.
 

* Swiss premium chocolate maker Lindt & Spruengli said strong demand for its Lindor pralines and gold foil-wrapped Easter bunnies meant  it was aiming for 2011 sales growth of 6-8 percent in local currencies. *****

Brazil to lend cash to farmers for coffee futures

* Loans destined for option premiums, futures margin calls

* Funds would come from Funcafe subsidized credit system

* Margin payments on futures swell with coffee price rally

Brazil's government plans to begin offering loans to coffee farmers to cover the cost of using hedging instruments, including margin payments on futures and option premiums, a senior coffee official told Reuters.

The government will make a total of 50 million reais ($30 million) available in loans in an effort to increase access to these more sophisticated price protection mechanisms which have grown costlier to hold amid steep rally in coffee prices.

"This is to give some financial muscle to the producer to operate on the exchange. It's a way to democratize access to the hedging and futures market," said Thiago Masson, substitute director at the agriculture ministry's coffee department.

The cash may not be available until around mid-year, and must be approved by a monetary policy committee, but if supply constraints keep prices higher, the loans should enable more farmers to lock in the best rates they have received in years.

Masson said he expected the steep rally in prices which have more than doubled in nine months would boost demand for the financing. But he added that the new credit line in the world's top coffee producer had been planned long before that.

The Funcafe coffee credit fund will make the loans at the subsidized rate of 6.75 percent, the same charged for other loans made to cover growers' costs until harvest and sale.

Individual producers will be able to obtain the credit to hedge from local banks though some of the cash may be made available through coffee cooperatives.

"This (credit line) is good as it provides an incentive. Producers need to protect themselves against a fall in price. That's what is important right now in a scenario of volatility," said Luiz Claudio Caffagni, commodities services manager at Brazil's commodity exchange, the BM&FBovespa.

Caffagni said that at today's prices, the 50 million reais credit line, if spent solely on options premiums would be enough to hedge roughly 1.25 million bags. How far the cash would stretch for margin calls would depend on the market.

Recently in Brazil and elsewhere, some hedgers on both the producing and importing sides have been forced to abandon hedges as the rally in the coffee market causes margins payable on futures contracts to balloon. See analysis: 

Around 674,000 arabica coffee contracts were traded at the Sao Paulo-based BM&FBovespa exchange last year, up 4 percent from 2009.

Brazil produced 48.1 million 60-kg bags of coffee last year and the forthcoming off-year crop to be harvested from May is expected to turn out 41.9-44.7 million bags.

New York arabica coffee futures for May delivery were trading 0.8 percent lower on Monday at $2.7220 per lb, more than double what arabica was fetching in June last year.
 

Brazil's government has been looking into alternative ways to provide price protection for farmers, and is considering moving away from a system of minimum price guarantees to crop insurance that protects against price falls as well losses. It expects this would still be several years off however.**********

COFFEE FORECAST TODAY & Yesterday's MARKET CLOSE REVIEW

NEW YORK, Arabica coffee futures ended weak on Monday, as investors fled risky assets as the world's third-biggest consumer Japan coped with the aftermath of a devastating earthquake.

U.S. cocoa also finished lower, falling from the sessionhighs after trading firm for much of the session on concern about escalating violence in top grower 

Ivory Coast and uncertainty about the Ivorian export ban set to expire Tuesday.

The opening times for these markets have been temporarily delayed by one hour, through March 25, due to seasonal time changes.

COFFEE
* May arabica coffee futures closed down 1.10 cents  at $2.7330 per lb.
 

* The market settled lower for the third straight day after  hitting a 34-year high at $2.9665 per lb last week.
 

* Coffee futures fell along with the commodity complex, as  the third-biggest economy Japan coped with a nuclear crisis,  and the earthquake and tsunami aftermath - traders.
 

* The economic picture caused many to take money off the  table where riskier assets, such as commodities, were concerned  - traders.
 

* Brazil's government plans to begin offering loans to  coffee farmers to cover the cost of using hedging instruments,  including margin payments on futures and option premiums, a senior coffee official told Reuters.

COCOA
* Benchmark May cocoa futures fell $23 to settle at $3,389.
 

* May closed at a $30 premium to July , widening  slightly from $28 the previous session.
 

* Market was strong for most of the session on concern as  top grower Ivory Coast appeared on the brink of civil war and  on uncertainty about the scheduled end of the export ban there  - traders. 
 

* Gunfire and explosions broke out in an Abidjan stronghold  of Laurent Gbagbo, just outside the private house of his army  chief in Ivory Coast, witnesses and a security source said, but  state TV denied his residence had been attacked. 
 

* Prices turned lower, joining the weak commodity complex  down as investors fled risky assets - traders.
 

* Patchy rains mixed with hot weather last week in Ivory  Coast's cocoa regions provided good condition for better  quality and abundant mid-crop growth compared with last season.******