Investing.com - U.S. softs futures were mixed during early U.S. morning trade on Wednesday, with coffee prices rallying more than 2% on the back of an upbeat assessment by the International Coffee Organization, while sugar and cotton futures edged lower in risk-off trade.
On the ICE Futures U.S. Exchange, Arabica coffee for July delivery traded at USD1.8095 a pound, surging 2.1%. It earlier rose by as much as 2.5% to trade at a session high of USD1.8118.
Prices touched USD1.7232 on May 9, the lowest since August 27, 2010.
Coffee prices have been under pressure in recent months, losing nearly 28% since mid-January as traders eyed a huge harvest in top grower Brazil and speculators pushed prices lower.
Brazil is the world's largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
But prices regained strength Wednesday after the International Coffee Organization said that global coffee consumption hit a record 137.9 million bags in 2011, as demand in emerging markets increased.
The agency said that consumption is "expected to remain buoyant", a dynamic which "could support firm prices."
Meanwhile, sugar futures for July delivery traded at USD0.2032 a pound during early U.S. morning trade, shedding 0.3%.
The July contract traded in a tight range between USD0.2039 a pound, the session high and a daily low of USD0.2020. Prices fell to USD0.2007 a pound on May 14, the lowest since September 1, 2010.
Sugar prices have been trading in a tight range just above a 20-month low since May 9. According to market participants a failed attempt at breaking below the key support level of USD0.2000 a pound has held prices up from moving even lower.
Technical traders noted that the sugar market remains in a major bear trend. Prices are down approximately 43% since hitting a three-decade high of USD0.3594 in February of last year.
Sugar prices have been under pressure in recent weeks, losing nearly 23% since March 20, as increasing competition for U.S. exports and ample global supplies have been dominating sentiment.
Elsewhere on the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD0.7795 a pound, tumbling 1.55%.
It earlier fell by as much as 1.7% to trade at a session low of USD0.7788. Prices hit USD0.7716 a pound on May 11, the lowest since July 20, 2010.
Cotton’s losses came as appetite for riskier assets weakened amid mounting fears over a Greek exit from the euro zone.
Speculation over the possibility of a Greek exit from the euro zone intensified on Tuesday, as talks aimed at forming a coalition government failed, fuelling fears over a potential Greek default and eventual exit from the euro zone.
The heightened sense of risk aversion prompted investors to shun riskier assets, such as stocks and industrial commodities, and flock to the relative safety of the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.1% to trade at 81.50, the highest since January 16.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Demand for cotton, as a non-food agricultural commodity, is seen as more closely linked to economic conditions and consumer sentiment than that for other farm crops.
The fiber has plunged almost 65% from a record in March 2011 as higher prices prompted farmers to plant more crops and demand in top consumer China slowed.
On the ICE Futures U.S. Exchange, Arabica coffee for July delivery traded at USD1.8095 a pound, surging 2.1%. It earlier rose by as much as 2.5% to trade at a session high of USD1.8118.
Prices touched USD1.7232 on May 9, the lowest since August 27, 2010.
Coffee prices have been under pressure in recent months, losing nearly 28% since mid-January as traders eyed a huge harvest in top grower Brazil and speculators pushed prices lower.
Brazil is the world's largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
But prices regained strength Wednesday after the International Coffee Organization said that global coffee consumption hit a record 137.9 million bags in 2011, as demand in emerging markets increased.
The agency said that consumption is "expected to remain buoyant", a dynamic which "could support firm prices."
Meanwhile, sugar futures for July delivery traded at USD0.2032 a pound during early U.S. morning trade, shedding 0.3%.
The July contract traded in a tight range between USD0.2039 a pound, the session high and a daily low of USD0.2020. Prices fell to USD0.2007 a pound on May 14, the lowest since September 1, 2010.
Sugar prices have been trading in a tight range just above a 20-month low since May 9. According to market participants a failed attempt at breaking below the key support level of USD0.2000 a pound has held prices up from moving even lower.
Technical traders noted that the sugar market remains in a major bear trend. Prices are down approximately 43% since hitting a three-decade high of USD0.3594 in February of last year.
Sugar prices have been under pressure in recent weeks, losing nearly 23% since March 20, as increasing competition for U.S. exports and ample global supplies have been dominating sentiment.
Elsewhere on the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD0.7795 a pound, tumbling 1.55%.
It earlier fell by as much as 1.7% to trade at a session low of USD0.7788. Prices hit USD0.7716 a pound on May 11, the lowest since July 20, 2010.
Cotton’s losses came as appetite for riskier assets weakened amid mounting fears over a Greek exit from the euro zone.
Speculation over the possibility of a Greek exit from the euro zone intensified on Tuesday, as talks aimed at forming a coalition government failed, fuelling fears over a potential Greek default and eventual exit from the euro zone.
The heightened sense of risk aversion prompted investors to shun riskier assets, such as stocks and industrial commodities, and flock to the relative safety of the U.S. dollar.
The dollar index, which tracks the performance of the greenback versus a basket of six other major currencies, was up 0.1% to trade at 81.50, the highest since January 16.
A stronger dollar reduces the appeal of U.S. crops to overseas buyers and makes commodities less attractive as an alternative investment.
Demand for cotton, as a non-food agricultural commodity, is seen as more closely linked to economic conditions and consumer sentiment than that for other farm crops.
The fiber has plunged almost 65% from a record in March 2011 as higher prices prompted farmers to plant more crops and demand in top consumer China slowed.