Investing.com - U.S. soft futures were higher during early U.S. morning trade on Tuesday, with coffee prices building on recent gains to hit a six-week high amid growing concerns over adverse weather conditions in top grower Brazil.
Meanwhile, sugar prices climbed to a two-week high, as the same unseasonable rain in Brazil that boosted coffee was seen benefitting sugar futures as well.
Brazil is the top producer of both commodities.
On the ICE Futures U.S. Exchange, Arabica coffee for September delivery traded at USD1.7788 a pound, rallying 1.85%. It earlier rose by as much as 2% to trade at USD1.7803, the highest since May 21.
Coffee prices were up for a third day, as concerns over the impact of rains in Brazil on the crop boosted sentiment on the commodity.
Brazil is the world’s largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
German lender Commerzbank said in a report last week that it turned bullish on Arabica beans, citing weather damage in South America.
"The long period of drought and frost in Minas Gerais, the most important arabica growing region in Brazil, is taking its toll," the bank said in a report.
Despite recent gains, coffee prices have been under pressure in recent months, losing nearly 25% since mid-January as traders eyed a huge harvest in top grower Brazil and speculators pushed prices lower.
Coffee fell to as low as USD1.4887 a pound on June 14, the lowest for the second-month contract since mid-June 2010.
Meanwhile, sugar futures for October delivery traded at USD0.2175 a pound, climbing 1.5%. It earlier rose by as much as 1.5% to trade at USD0.2175 a pound, the highest since June 21.
Prices touched USD0.2180 a pound on June 21, the highest since late-April, as concerns that heavy rains in Brazil could damage sugarcane crops in the country’s center-south region boosted sentiment on the sweetener.
The nation’s top sugar industry group Unica said sugar production in the center-south region in the first half of June came in at 1.37 million tonnes, 32% below the same period last year, as rains “severely hampered" the cane harvest.
Sugar production since the start of the harvest totaled 4.9 million tons, down 28.1% on the year, Unica said.
Brazil’s Center South-region produces nearly 90% of the nation’s sugar. Brazil 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.
Market participants noted that the sugar market remains in a major bear trend. Prices are down approximately 40% since hitting a three-decade high of USD0.3594 in February of last year.
Elsewhere, cotton futures for October delivery traded at USD0.7278 a pound, adding 0.65%. It earlier rose by as much as 0.8% to trade at USD0.7295 a pound, the highest since June 20.
Front-month prices slumped to a 32-month low of USD0.6617 a pound on June 4.
Cotton prices found support after the U.S. Department of Agriculture said in its weekly crop progress report published after Monday’s closing bell that nearly 47% of the crop was rated in ‘good’ to ‘excellent’ condition as of July 1, down from 50% a week earlier.
In the major producing state of Texas, only 35% of the cotton crop was seen as in ‘good’ or ‘excellent’ health, compared to 36% the previous week.
The fiber is down almost 65% from a record in March 2011 as higher prices prompted farmers to plant more crops and demand in top consumer China slowed.
Meanwhile, sugar prices climbed to a two-week high, as the same unseasonable rain in Brazil that boosted coffee was seen benefitting sugar futures as well.
Brazil is the top producer of both commodities.
On the ICE Futures U.S. Exchange, Arabica coffee for September delivery traded at USD1.7788 a pound, rallying 1.85%. It earlier rose by as much as 2% to trade at USD1.7803, the highest since May 21.
Coffee prices were up for a third day, as concerns over the impact of rains in Brazil on the crop boosted sentiment on the commodity.
Brazil is the world’s largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
German lender Commerzbank said in a report last week that it turned bullish on Arabica beans, citing weather damage in South America.
"The long period of drought and frost in Minas Gerais, the most important arabica growing region in Brazil, is taking its toll," the bank said in a report.
Despite recent gains, coffee prices have been under pressure in recent months, losing nearly 25% since mid-January as traders eyed a huge harvest in top grower Brazil and speculators pushed prices lower.
Coffee fell to as low as USD1.4887 a pound on June 14, the lowest for the second-month contract since mid-June 2010.
Meanwhile, sugar futures for October delivery traded at USD0.2175 a pound, climbing 1.5%. It earlier rose by as much as 1.5% to trade at USD0.2175 a pound, the highest since June 21.
Prices touched USD0.2180 a pound on June 21, the highest since late-April, as concerns that heavy rains in Brazil could damage sugarcane crops in the country’s center-south region boosted sentiment on the sweetener.
The nation’s top sugar industry group Unica said sugar production in the center-south region in the first half of June came in at 1.37 million tonnes, 32% below the same period last year, as rains “severely hampered" the cane harvest.
Sugar production since the start of the harvest totaled 4.9 million tons, down 28.1% on the year, Unica said.
Brazil’s Center South-region produces nearly 90% of the nation’s sugar. Brazil 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.
Market participants noted that the sugar market remains in a major bear trend. Prices are down approximately 40% since hitting a three-decade high of USD0.3594 in February of last year.
Elsewhere, cotton futures for October delivery traded at USD0.7278 a pound, adding 0.65%. It earlier rose by as much as 0.8% to trade at USD0.7295 a pound, the highest since June 20.
Front-month prices slumped to a 32-month low of USD0.6617 a pound on June 4.
Cotton prices found support after the U.S. Department of Agriculture said in its weekly crop progress report published after Monday’s closing bell that nearly 47% of the crop was rated in ‘good’ to ‘excellent’ condition as of July 1, down from 50% a week earlier.
In the major producing state of Texas, only 35% of the cotton crop was seen as in ‘good’ or ‘excellent’ health, compared to 36% the previous week.
The fiber is down almost 65% from a record in March 2011 as higher prices prompted farmers to plant more crops and demand in top consumer China slowed.