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Soft futures - Sugar soars 2% as short covering rally continues

Published 01/30/2013, 07:50 AM
Investing.com - U.S. soft futures were mostly higher during U.S. morning trade on Wednesday, with sugar prices jumping 2% as market players closed out bets that prices would fall further after futures moved into oversold territory.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1870 a pound, up 1.95% on the day. The March contract rose by as much as 2.1% earlier in the session to hit a daily high of USD0.1875 a pound.

Despite Wednesday’s gains, sugar futures prices have been under heavy selling pressure in recent months as sentiment on the sweetener was dampened amid the view that global supplies are more than ample to meet world demand.

The March contract fell to USD0.1806 a pound on January 23, the weakest level since August 12, 2010.
 
Meanwhile, cotton futures for March delivery traded at USD0.8278 a pound, up 0.5% on the day. The March contract rose by as much as 1.7% earlier in the session to hit a daily high of USD0.8309 a pound.

Cotton futures rallied to an eight-month high of USD0.8394 a pound on January 24, amid indications of strong demand from top consumer China and concerns over U.S. supplies.

Sentiment on the fiber improved after U.K.-based industry group Cotlook last week cut its forecast for a global cotton surplus by 2.4%, citing increasing demand from South Asian countries.

Global cotton supplies will outpace demand by 3.53 million metric tons in the current marketing year, down from a December forecast of 3.62 million.

The research company boosted its forecast for global consumption by 1.2% to 22.5 million tons from last month.   

Elsewhere, Arabica coffee for March delivery traded at USD1.5012 a pound, easing up 0.25%. The March contract held in a tight trading range between USD1.4960 a pound, the daily low and a session high of USD1.5057 a pound.

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