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Softs mixed; coffee regains strength on technical bounce

Published 04/03/2014, 07:38 AM
Updated 04/03/2014, 07:38 AM
Coffee regains strength on technical bounce

Investing.com - U.S. coffee prices regained strength on Thursday, as investors returned to the market after futures held above a key support level, indicating bullish chart signals.

On the ICE Futures U.S. Exchange, Arabica coffee for May delivery rose 0.83%, or 1.43 cents, to trade at $1.7258 a pound during U.S. morning hours.

Coffee prices fell to $1.6790 a pound on Wednesday, the lowest since March 24, before recovering to settle at $1.7270 a pound, down 1.46%, or 2.55 cents.

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 sugarfor May delivery shed 0.41% to trade at $0.1696 a pound.

The May sugar contract plunged to $0.1679 a pound on Wednesday, the weakest level since March 25, before settling at $0.1697, down 1.22%, as investors continued to monitor weather and crop conditions in top grower Brazil.

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 cottonfor May delivery eased up 0.02% to trade at $0.9153 a pound.

The May cotton contract slumped to $0.9121 a pound on Wednesday, the lowest since March 26, before settling at $0.9151 a pound, down 0.61%.

Cotton prices have been on a downward trend in recent sessions after 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.

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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