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Soft futures mixed; Sugar eases off 3-year low on bargain buying

Published 06/05/2013, 07:36 AM
Updated 06/05/2013, 07:36 AM

Investing.com - U.S. soft futures were mixed during U.S. morning trade on Wednesday, with sugar prices bouncing off the lowest level since July 2010 as investors returned to the market to seek cheap valuations.

On the ICE Futures U.S. Exchange, sugar futures for July delivery traded at USD0.1646 a pound, up 0.45% on the day.

The July contract was stuck in a range between USD0.1641 a pound, the daily low and a session high of USD0.1649 a pound.

Sugar prices fell to USD0.1632 a pound, the lowest level since July 2010, on Tuesday amid concerns over ample global supplies.

The sweetener has been under heavy selling pressure in recent months 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.

Meanwhile, Arabica coffee for July delivery traded at USD1.2813 a pound, up 0.55% on the day. The July contract held in a range between USD1.2770 a pound, the daily low and a session high of USD1.2868 a pound.

The July coffee contract fell to USD1.2507 a pound on May 31, the lowest level since October 2009.

The coffee market has been under heavy selling pressure in recent weeks as traders eyed a huge harvest in top grower Brazil.

Some technical selling also weighed after prices broke below key support levels, triggering a flurry of automatic sell orders amid bearish chart signals.

Elsewhere, cotton futures for July delivery traded at USD0.8426 a pound, down 0.35% on the day. The July contract was stuck in a range between USD0.8411 a pound, the daily low and a session high of USD0.8470 a pound.

Cotton futures rallied to a two-week high of USD0.8613 a pound on Tuesday amid renewed concerns over supplies of the fiber in the near-term.

The U.S. Department of Agriculture said that nearly 82% of the U.S. cotton crop was planted as of June 2, below the 87% planted in the same week a year earlier. The five-year average for this time of year is 83%.

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