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Soft futures lower - Sugar re-approaches 2-year low

Published 02/12/2013, 07:33 AM
Updated 02/12/2013, 07:33 AM

Investing.com - U.S. soft futures were lower during U.S. morning trade on Tuesday, with sugar prices re-approaching the lowest level since August 2010 amid ongoing concerns over a global supply glut.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1821 a pound, down 1.4% on the day. The March contract fell by as much as 1.7% earlier in the day to hit a session low of USD0.1820 a pound.

The sweetener fell to USD0.1803 a pound on February 8, the lowest level since August 2010.

Sugar futures prices have been under heavy selling pressure in recent months as sentiment on the sweetener was dampened amid the view that global supplies are more than ample to meet world demand.

Industry group Sucden do Brasil said last week sugar-cane harvesting in the country’s center south, the main growing region of the world’s largest producer, will start earlier this year because of a record crop.

The South American country is the world’s largest sugar producer and exporter, with the USDA estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

Meanwhile, Arabica coffee for March delivery traded at USD1.3953 a pound, down 0.25% on the day.

The March contract fell by as much as 0.5% earlier in the session to hit a daily low of USD1.3930 a pound, the weakest level since June 2010.

Coffee prices have been on a downtrend in recent weeks as traders worried over ample global supplies and speculators pushed prices lower.

Output in Colombia, the biggest producer of mild washed Arabica in Latin America, increased 64% in January to 877,000 60-kilogram bags, the Colombian Federation of Coffee Growers said last week.

The country's coffee output rose 9% in the 12 months ended in January to 8.09 million bags, the federation said in a statement.

Elsewhere, cotton futures for March delivery traded at USD0.8248 a pound, down 0.5% on the day. The March contract fell by as much as 1.2% earlier to hit a session low of USD0.8189 a pound.

Cotton prices declined as a bout of profit-taking kicked in after futures touched a one-week high of USD0.8332 a pound on Monday, amid indications of strong demand from top consumer China and concerns over U.S. supplies.

Prices of the fiber hit an eight-month high of USD0.8394 a pound on January 24.

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