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Coffee prices news june 17 2011, agriculture commodities - Commodities Roundup: COFFEE - Recovering Columbian Production could be Boon to Call Sellers; The Coffee market reached its highest price levels in 14 years in early 2011. And while the price rally was supported both by underlying fundamentals and macroeconomic influences, those very same forces may now be ever so gradually shifting away from the bulls. Nonetheless, there is still plenty of hefty premiums left in the call options. If you are an option seller looking for what could be rapid time decay, you may want to get out your shopping baskets.

June finds the 2011 Brazilian Coffee harvest in full swing. Bulls have touted the expected lower yield of this year's crop as a main justification of higher prices. Yet the crop is only expected to be about 8-10 million bags less than last year's record production (see chart below).

Brazil's 2010 Coffee harvest was a new record. 2011's yield is expected to be 8-10 million bags lower - but still high by historical standards.

The market has spent the better part of the year pricing this anticipated lower 2011 yield - a main reason why prices are so high at this time. However, now that harvest is actually taking place, new supply is working it's way onto world markets. Regardless of expected yields, fresh supplies have historically had a dampening effect on coffee prices.