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Soft futures higher - Cotton up more than 1% ahead of USDA

Published 04/10/2013, 07:50 AM
Investing.com - U.S. soft futures were mostly higher during U.S. morning trade on Wednesday, with cotton prices bouncing off a five-week low amid some position squaring ahead of a closely-watched supply and demand report from the U.S. Department of Agriculture later in the day.

On the ICE Futures U.S. Exchange, cotton futures for May delivery traded at USD0.8550 a pound, up 1% on the day. The May contract rose by as much as 1.3% earlier in the day to hit a session high of USD0.8584 a pound.

U.S. cotton prices fell to USD0.8438 a pound on Tuesday, the weakest level since March 1.

Cotton prices have been under heavy selling pressure in recent sessions, suggesting that cotton's recent upswing may be losing momentum.

Cotton prices rallied to an 11-month high of USD0.9384 a pound on March 15 on the back of strong demand from top consumer China and concerns over U.S. supplies.

Meanwhile, sugar futures for May delivery traded at USD0.1784 a pound, up 0.5% on the day. The May contract rose by as much as 0.6% earlier in the session to hit a daily high of USD0.1786 a pound.

Sugar futures rallied to a two-week high of USD0.1788 a pound on Monday, before turning lower as momentum from a short covering rally faded.

May sugar prices fell to USD0.1747 a pound on April 3, the lowest level since August 2010, amid the view that global supplies are more than ample to meet world demand.

Elsewhere, Arabica coffee for May delivery traded at USD1.3620 a pound, up 0.4% on the day. The May contract rose by as much as 0.6% earlier in the session to hit a daily high of USD1.3655 a pound.

Coffee futures fell to a three-week low of USD1.3475 a pound on Tuesday, as farmers in Brazil began harvesting the coffee crop amid expectations for a bumper crop.

Brazil is the world's largest producer and exporter of Arabica coffee.

The May contract fell to a 34-month low of USD1.3207 a pound on March 20, as speculators pushed prices lower amid worries over sufficient global supplies.

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