Investing.com - U.S. soft futures declined on Thursday, with coffee prices plunging more than 3% to hit the weakest level in nearly three-weeks as traders continued to close out bets on higher prices amid easing concerns over Brazil’s crop.
On the ICE Futures U.S. Exchange, Arabica coffee for May delivery tumbled to a daily low of $1.7928 a pound, the cheapest since March 3. Arabica prices last traded at $1.7998 a pound during U.S. morning hours, down 3.41%, or 6.1 cents.
Coffee prices lost 3.16%, or 6.05 cents on Wednesday to settle at $1.8550 a pound.
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.
However, prices have been under heavy selling pressure ever since Brazil’s coffee export association Cecafe said last week that ample coffee stocks from the last harvest will allow the nation's exports to increase 6% this year and help ease the effects of a severe drought.
According to Cecafe, Brazil is expected to export a total of 33 million 60-kilogram bags in 2014, up from 31.1 million last season.
Brazil is the world's largest producer and exporter of Arabica coffee.
Meanwhile, sugar futures for May delivery fell 0.75% to trade at $0.1722 a pound. The May sugar contract rallied 1.05% to settle at $0.1732 a pound on Wednesday.
Market players remained focused on the extent of damage to Brazil's crop prospects from dry weather earlier this year.
Sugar rallied to a four-month high of $0.1846 a pound on March 6, amid speculation dry weather in Brazil will cut this year’s cane crop.
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, cotton futures for May delivery shed 0.7% to trade at $0.9199 a pound. The May cotton contract dipped 0.33% on Wednesday to settle at $0.9262 a pound.
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