Softs mixed; Sugar steady near 6-month high on Brazil crop concerns

Published 10/07/2013, 07:44 AM
Investing.com - U.S. soft futures were mixed on Monday, with sugar prices trading near the highest level since March amid concerns over crop prospects in top grower Brazil.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1854 a pound, up 0.05%. Prices of the sweetener traded in a range between USD0.1850 a pound, the daily low and a session high of USD0.1854 a pound.

The October contract ended 0.2% lower at USD0.1855 a pound on Friday.

Sugar prices rallied to a five-month high of USD0.1856 a pound on October 2, the highest level since March 18.

Sugar prices were buoyed after Unica, Brazil’s sugar industry association, said sugar output in Brazil’s center-south region will produce 34.2 million metric tons of the sweetener in the 12 months that started April 1, down 3.7% from a previous estimate.

Brazil’s center-south region accounts for nearly 90% of Brazil’s sugarcane output.

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, Arabica coffee for December delivery traded at USD1.1448 a pound, up 0.25%. Arabica prices held in a range between USD1.1413 a pound, the daily low and a session high of USD1.1448 a pound.

The December contract settled down 0.82% to end at USD1.1440 a pound on Friday.

Prices of the bean fell to a four-year low of USD1.1322 a pound on October 1, as market players focused on massive global supplies.

Meanwhile, cotton futures for December delivery traded at USD0.8591 a pound, down 1.45%.

Cotton prices fell by as much as 1.9% earlier in the day to hit a session low of USD0.8550 a pound, the weakest level since September 27. The December contract settled 0.3% lower at USD0.8718 a pound on Friday.

The U.S. Department of Agriculture’s weekly crop progress report scheduled for later in the day will likely be postponed due to the U.S. government shutdown.

The agency said that approximately 44% of the U.S. cotton crop was in ‘good’ to ‘excellent’ condition as of last week, down from 43% in the preceding week.

According to the USDA, nearly 5% of the cotton crop was harvested as of last week, below the five-year average of 10% for this time of year.

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