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Softs mixed; coffee plunges more than 2% on Brazil rain

Published 04/02/2014, 07:45 AM
Updated 04/02/2014, 07:45 AM
Coffee plunges more than 2% on Brazil rain

Investing.com - U.S. coffee prices extended steep losses from the previous session on Wednesday, after weather forecasts pointed to much-needed rain key coffee-growing regions in Brazil.

On the ICE Futures U.S. Exchange, Arabica coffee for May delivery tumbled to a session low of $1.6983 a pound, the weakest level since March 24.

Coffee last traded at 1.7153 a pound during U.S. morning hours, down 1.73%, or 3.02 cents. Coffee prices lost 1.49%, or 2.65 cents, on Tuesday to settle at $1.7525 a pound.

Coffee prices have been under heavy selling pressure in recent sessions amid easing concerns over crop conditions in Brazil.

Arabica prices hit a two-year high of $2.0975 a pound on March 12 as drought conditions in key coffee-growing regions in Brazil was expected to curb output.

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

Meanwhile, US sugar for May delivery shed 0.18% to trade at $0.1706 a pound, the lowest since March 26, as investors continued to monitor weather and crop conditions in top grower Brazil.

The May sugar contract plunged 3.32% on Tuesday to settle at $0.1718 a pound

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.

Elsewhere, US cotton for May delivery eased up 0.1% to trade at $0.9217 a pound. The May cotton contract lost 1.55%, or 1.45 cents, on Tuesday to settle at $0.9207 a pound.

The U.S. Department of Agriculture projected higher-than-expected plantings of the fiber this spring. According to the agency, farmers in the U.S. will plant 11.1 million acres of cotton this year, up 7% from a year ago.

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Prices of the fiber hit a two-year high of $0.9735 a pound on March 26 as ongoing concerns over tightening nearby supplies in the U.S., the world's top exporter, boosted prices.

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