Commodities : Thursday, Dec. 26, 1985 : Coffee Drops, Rebounds

Coffee futures prices hit bottom on profit taking Thursday then bounced back to the limit highs set for daily trading by the Coffee, Sugar and Cocoa Exchange in New York.

“It was sheer panic,” said Judy Weissman, an analyst in New York with Shearson Lehman Brothers Inc.

Coffee futures have been on the upswing for two weeks because of drought conditions in Brazil, the world’s No. 1 producing nation, and this has been reflected in wholesale prices this week.

Procter & Gamble, one of the largest domestic coffee roasters, on Thursday increased wholesale prices as much as 60 cents a pound, bringing its ground roasted Folgers brand to $3.44 for a one-pound can. Earlier this week, General Foods Corp. also instituted a 60-cent increase and Chock Full O’ Nuts increased its price by 65 cents a pound.

Coffee futures opened the limit 6 cents a pound higher, but the contract for delivery in March, on which there is no limit, started to fall.

“It broke the $2.40 support level and touched off major stops” triggering sell orders, Weissman said. The other contracts followed and March slumped as much as 20 cents.