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Soft futures lower - Cotton slumps ahead of USDA report

Published 05/09/2013, 07:33 AM
Investing.com - U.S. soft futures were mostly lower during U.S. morning trade on Thursday, with cotton prices retreating from the previous session’s five-week high as traders readjusted positions ahead of Friday’s highly-anticipated U.S. Department of Agriculture report on U.S. fiber supplies.

On the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD0.8723 a pound, down 0.5% on the day. The May contract fell by as much as 1% earlier in the day to hit a session low of USD0.8680 a pound.

Cotton prices rose to USD0.8807 a pound on Wednesday, the strongest level since April 5.

Market players continued to monitor U.S. planting prospects. The U.S. Department of Agriculture said Monday that nearly 17% of the U.S. cotton crop was planted as of last week, up from 14% in the preceding week.

Meanwhile, sugar futures for July delivery traded at USD0.1745 a pound, little changed on the day. The July contract held in a range between USD0.1741 a pound, the daily low and a session high of USD0.1748 a pound.

Sugar futures fell to a low of USD0.1718 a pound on May 2, the weakest level since August 10, 2010, as farmers in Brazil started to accelerate harvesting of the nation's sugar crops.

Farmers in Brazil's center-south region, which accounts for about 90% of the country's production, are forecast to harvest a record 589.6 million metric tons of sugar cane in the 2013-14 season, which began April 1, according to Unica, Brazil's sugar industry association.

Brazil is the world's largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

Elsewhere, Arabica coffee for July delivery traded at USD1.4378 a pound, flat on the day. The July contract was stuck in a trading range between USD1.4332 a pound, the daily low and a session high of USD1.4393 a pound.

Prices have been well-supported in recent sessions amid speculation coffee exporters in South and Central America were withholding supplies until prices recover.

Coffee prices rallied to a three-week high of USD1.4427 a pound on Wednesday.

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