Coffee, last year's best-performing commodity, is now the worst thanks to the return of rains in parched growing areas of Brazil.

Showers in February and March brightened the outlook for crops that will start being collected in May. With more coffee on the way, exporters are now shipping more from inventories to make room. Hedge funds have bet on lower prices for six weeks, the longest stretch in more than a year.

Bull-to-bear market gyrations spurred by changing weather in Brazil, the top producer and exporter, made coffee the most volatile commodity in the past year. Prices surged 50 percent in 2014 amid a drought. Improved conditions pushed futures down 17 percent since December, the biggest loss among the 22 components of the Bloomberg Commodity Index.

"As the stress of drought recedes, it looks like the harvest could be better," Frances Hudson, a global thematic strategist who helps oversee $383 billion at Standard Life Investments in Edinburgh, said. "It seems an entirely rational move" to hold short bets, she said.

The net-bearish position in coffee was 4,613 futures and options in the week ended on April 7, US Commodity Futures Trading Commission data show.

Arabica coffee on ICE Futures US in New York fell 2.2 percent last week, as the Bloomberg Commodity Index slipped 0.2 percent. The MSCI All-Country World Index of equities rose 1.9 percent and the Bloomberg Dollar Spot Index added 1.8 percent.

Brazil exported the most unroasted coffee in March for the month since at least 1990, data from exporters' group CeCafe showed last week. A tour of the country's growing region showed that "plants looked quite lush and strong", Christian Wolthers, the president of Fort Lauderdale, Florida-based importer Wolthers Douque, said.

Wolthers estimates the nation's 2015 arabica harvest will rise 12 percent to 34.2 million bags from a year earlier. A bag weighs 60 kilograms.

'Worsening conditions'

While showers in March revived crops, dry weather returned last week, leading to "worsening conditions" for plants in some areas, MDA Weather Services said. Trees will struggle to rebound from 2014's drought, which was the worst in decades. The region is still in need of greater rainfall, especially with the dry season starting later this month, World Weather Inc.

Gains for demand will also tighten supplies, even as Brazil's harvest rebounds. Global coffee consumption will climb 3.7 percent this year, a fourth consecutive increase, the US Department of Agriculture forecasts.

"Coffee is either at or near a bottom," Lara Magnusen, a La Jolla, California-based portfolio manager at Altegris Investments Inc, which oversees $2.65 billion, said.

(China Daily USA 04/14/2015 page16)