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Soft futures mixed - Sugar falls to lowest since August 2010

Published 05/02/2013, 07:32 AM
Updated 05/02/2013, 07:32 AM
Investing.com - U.S. soft futures were mixed during U.S. morning trade on Thursday, with sugar prices falling to the lowest level since August as sentiment on the sweetener remained downbeat as farmers in Brazil started to accelerate harvesting of the nation's sugar crops.

Brazil is the world's largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

On the ICE Futures U.S. Exchange, sugar futures for July delivery traded at USD0.1725 a pound, down 0.4% on the day. The July contract fell by as much as 0.5% earlier in the session to hit a daily low of USD0.1723 a pound, the weakest level since August 10, 2010.

Sugar prices have been under heavy selling pressure in recent sessions amid the view that global supplies are more than ample to meet world demand.

Unica, Brazil's sugar industry association said last week that beneficial weather and expanded growing areas are expected to lift output in Brazil this season by almost 11% to a fresh record high.

Farmers in Brazil's center-south region, which accounts for about 90% of the country's production, are forecast to harvest 589.6 million metric tons of sugar cane in the 2013-14 season, which began April 1.

Sugar output will likely total 35.5 million metric tons, up 4.1% from the previous season, Unica said.

Meanwhile, Arabica coffee for July delivery traded at USD1.3595 a pound, gaining 0.7% on the day. The July contract was stuck in a trading range between USD1.3512 a pound, the daily low and a session high of USD1.3628 a pound.

Coffee prices tumbled to a five-week low of USD1.3275 a pound earlier in the week, as traders continued to monitor weather conditions in Brazil.

Brazil is the world's largest producer and exporter of Arabica coffee.

Elsewhere, cotton futures for July delivery traded at USD0.8436 a pound, up 0.6% on the day. The May contract rose by as much as 1.3% earlier in the session to hit a daily high of USD0.8501 a pound.

Cotton prices fell sharply on Wednesday, amid concerns over a slowdown in global demand for the fiber.

The International Cotton Advisory said Wednesday that global cotton inventories at the end of July 2014 will be 18.25 million metric tons, 11% higher than estimated last month.

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