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Soft futures mostly lower; Sugar drops to 2-week low

Published 10/29/2013, 07:07 AM
Investing.com - U.S. soft futures were mostly lower on Tuesday, with sugar prices falling to the weakest level in two weeks amid easing concerns over a disruption to supplies from Brazil.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1870 a pound, down 1.3% on the day.

Prices of the sweetener fell to a session low of USD0.1864 a pound earlier, the weakest level since October 16.

The March contract ended 0.63% lower at USD0.1891 a pound on Monday.

Prices of the sweetener rallied to a one-year high of USD0.2016 a pound on October 18, after Copersucar, Brazil’s largest sugar trader, said that a fire damaged six of its warehouses at a key port in Santos, destroying nearly 180,000 tons of raw sugar.

However, prices have since lost nearly 8% as ship-loaders escaped damage, easing concerns over a disruption to supplies from Brazil, the world’s largest producer and exporter of the sweetener.

Meanwhile, Arabica coffee for December delivery traded at USD1.0735 a pound, down 0.15%. Arabica prices fell to USD1.0690 a pound earlier in the day, the weakest level since March 2009.

The December contract settled 1.42% lower at USD1.0755 a pound on Monday.

Coffee prices have been on a downward trend in recent weeks as market players continued to focus on massive global supplies.

Wall Street investment bank Goldman Sachs lowered its price forecast for Arabica coffee by almost 8% earlier in the month, citing favorable weather and ample global supplies.

Arabica prices will average USD1.2000 a pound in three-, six- and 12 months, down from a previous forecast of USD1.3000 a pound.

Elsewhere, cotton futures for December delivery traded at USD0.7884 a pound, up 0.25%. Cotton prices traded in a range between USD0.7863 a pound, the daily low and a session high of USD0.7888 a pound.

The December contract slumped to USD0.7852 a pound on Monday, the weakest level since January 22, before closing at USD0.7865, down 0.54% on the day.

Cotton prices traded at the lowest level since January as favorable weather conditions in key cotton-growing states in the U.S. was likely to further boost the pace of the harvest.

Agricultural meteorologists said that drier and colder weather expected across the U.S. Midwest in the next few days will allow a resumption of active harvesting of the 2013 U.S. cotton crop.

The U.S. Department of Agriculture said Monday that approximately 34% of the U.S. cotton harvest was completed as of October 27, improving from the 21% recorded a week earlier.

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