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Softs mixed; coffee rallies 2% to trade just below 2-year peak

Published 03/10/2014, 08:38 AM
Updated 03/10/2014, 08:38 AM
Coffee futures trade just below two-year high

Coffee futures trade just below two-year high

Investing.com - U.S. soft futures were mixed on Monday, with coffee prices rallying sharply to re-approach the highest level since March 2012 amid ongoing concerns over hot and dry weather conditions in Brazil, the world's largest producer and exporter of Arabica coffee.

On the ICE Futures U.S. Exchange, Arabica coffee for May delivery rose to a session high of $2.0293 a pound. Arabica prices last traded at $2.0173 a pound during U.S. morning hours, up 2.7%.

The May coffee contract picked up 0.66% on Friday to settle at $1.9685 a pound.

Coffee surged to a two-year high of $2.0410 a pound on March 5 as drought conditions in key coffee-growing regions in Brazil was expected to curb output. Year-to-date, Arabica coffee is up almost 82%.

Meanwhile, sugar futures for May delivery fell to a session low of $0.1752 a pound, the cheapest since March 4, before recovering to last trade at $0.1784, down 0.55%.

The May sugar contract lost 1.69% on Friday to settle at $0.1801 a pound, as investors locked in gains from a recent rally.

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 inched down 0.1% to trade at $0.9117 a pound, as investors readjusted positions ahead of the U.S. Department of Agriculture’s closely-watched monthly supply and demand report due later in the day.

The May cotton contract rose to $0.9335 a pound last Friday, the most since August 19, amid concerns freezing temperatures in key cotton-growing states in the U.S. will curb output and damage the quality of the harvest.

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