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Softs - Sugar futures trade close to 1-month low on Brazil crop hopes

Published 10/31/2012, 08:29 AM
Investing.com - U.S. soft futures were mixed during U.S. morning trade on Wednesday, with sugar prices re-approaching a one-month low amid receding concerns over the harvest in Brazil, the world’s top producer of the sweetener.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1957 a pound, dipping 0.2%. The March contract fell by as much as 0.5% earlier in the session to hit a daily low of USD0.1945 a pound.

Front-month prices slumped to USD0.1927 on October 29, the cheapest level since September 21.

Sentiment on the sweetener has turned negative since hitting a two-month high of USD0.2176 a pound on October 4, amid receding concerns over the pace of the harvest in Brazil’s Center South-region.

The country’s leading sugar industry group Unica said last week sugar output in Brazil’s Center South-region jumped 57% in the first half of October.

Output in the region rose to 2.79 million metric tons between October 1 and October 15 from 1.78 million a year earlier

Brazil’s Center South-region produces nearly 90% of the nation’s sugar. The South American country is the world’s largest sugar producer and exporter, with the USDA estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

Meanwhile, Arabica coffee for December delivery traded at USD1.5730 a pound, gaining 0.45%. The December contract traded in a range of USD1.5890 a pound, the daily high and a session low of USD1.5710 a pound.

December coffee futures fell to an eight-week low of USD1.5632 a pound on October 29.

Coffee futures have been under heavy selling pressure since touching a ten-week high of USD1.8542 a pound on October 3, as concerns over the pace of the Brazilian coffee harvest eased.

Brazil is the world’s largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.

Market players said that an anticipated rebound in Colombia's crop further weighed and added to view that global supplies of the bean are more than ample.

Elsewhere, cotton futures for December delivery traded at USD0.7131 a pound, adding 0.55%. The December contract rose by as much as 0.85% earlier in the session to hit a daily high of USD0.7186 a pound.

The fiber fell to a two-week low of USD0.7081 a pound on Monday, after prices were unable to hold above their 100-day moving average, triggering sell orders amid bearish chart signals.

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