Brazil Coffee-Farmers sell, tune into rising market
  * Farmers sell as prices rise, hopeful of further rises
 * Gov't to give new estimate for 2010/11 crop on Wednesday
  
   BRASILIA, Sept 8 (Reuters) - Brazil's coffee producers are selling at some of the best rates in years with New York coffee futures at 13-1/4-year highs on Wednesday, though some growers are holding off, hoping rates will climb further.
   "The producer is betting on a firm market and that's what's happening. They're selling in a disciplined way, little by little. It's a big harvest with good prices so not a bad situation (for farmers)," said trader Gunter Hausler from the Stockler exporter in Santos, home to Brazil's largest port.

   He said "good cup" grades were changing hands at 25-30 cents under the New York futures contract price while semi-washed kinds, akin to milder Colombian produce, were priced at a premium of around 10 to 15 cents.
   New York futures have risen sharply as funds snap up contracts speculating global supplies will tighten. Dry conditions in Brazil could leave coffee trees with insufficient moisture when trees begin flowering in a few weeks time.
   That could reduce output next year from a harvest that will already be limited in size due to the biennial dip in output.
   The December arabica futures contract in New York closed at $1.9455 per lb on Wednesday, rising 2.25 cents, or 1.2 percent, the highest settlement for the second position on a continuation chart since June 1997. [ID:nN08507861]
   "Funds are giving producers a fantastic party in Brazil, there's no doubt about it," said trader John Wolthers at Comexim based in Santos.
   Trade has been minimal this week due to bank holidays in the United States on Monday and Brazil on Tuesday and a holiday on Wednesday in Brazil's main port town Santos, where many coffee exporters are based.
   Exporters and cooperatives said the availability of coffee was generally good. Farmers were selling into the market, encouraged by the price but still not rushing to empty their stores as this year's harvest tails off.
   "The higher the market goes, the easier it has been to buy," Wolthers said.
   But trader Eder Latronico at the Cafe Pocos cooperative in Brazil's biggest coffee state, Minas Gerais, said some of his cooperatives' members were anticipating even better profits in the coming weeks.
   "They are selling just what they need to, but they expect the market to go up. For now their strategy is to wait for a better price," he said.
   Some traders based in producing regions said there had been light showers on Tuesday but that much more moisture was needed to invigorate trees for flowering due to begin in a few weeks time and marking the start of the next production cycle.
   Forecaster Somar said a cold front would sweep past southeastern Brazil but fail to bring significant rainfall to the coffee regions and the weather would likely remain dry for the next 10 days or so.
   Government crop agency Conab will give an updated estimate for coffee production from the 2010/11 crop, most of which has now been harvested. Traders were optimistic of a bumper crop this year but it was let down by quality problems and small sized beans.
   In its initial estimate for the crop in early May, Conab said it expected a harvest of 47.04 million 60-kg bags. Its estimates are consistently below those of traders whose figures ranged from 50-55 million bags.
    ($=1.72 reais)
   (Reporting by Peter Murphy;editing by Sofina Mirza-Reid) 
     
Thursday, 09 September 2010 02:48:13RTRS