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Soft futures - Sugar re-approaches 2-year low as ample supplies weigh

Published 02/26/2013, 07:40 AM
Investing.com - U.S. soft futures were mostly lower during U.S. morning trade on Tuesday, with sugar prices re-approaching the lowest level since August 2010 amid ongoing concerns over a global supply glut.

On the ICE Futures U.S. Exchange, sugar futures for May delivery traded at USD0.1796 a pound, down 0.5% on the day. The May contract fell by as much as 1.35% earlier in the day to hit a session low of USD0.1791 a pound.

The sweetener fell to USD0.1788 a pound on February 14, the lowest level since August 2010.

Sugar futures prices have been under heavy selling pressure in recent weeks as sentiment on the sweetener was dampened amid the view that global supplies are more than ample to meet world demand.

In Brazil, sugar-cane harvesting in the country’s center south, the main growing region of the world’s largest producer, will start earlier this year because of a record crop.

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 May delivery traded at USD1.4180 a pound, down 0.45% on the day. The March contract declined by as much as 0.9% earlier in the session to hit a daily low of USD1.4112 a pound.

Prices were lower as a round of profit-taking kicked in after futures climbed to a three-week high of USD1.4442 a pound on Monday.

Coffee prices have been on an upward trend since falling to a two-and-a-half-year low of USD1.3647 a pound on February 15, as traders closed out bets prices would fall further.

Elsewhere, cotton futures for May delivery traded at USD0.8228 a pound, up 0.7% on the day. The March contract rose by as much as 0.9% earlier in the day to hit a session high of USD0.8242 a pound.

Cotton prices turned higher as investors returned to the market to seek cheap valuations after futures fell to a one-week low of USD0.8169 a pound earlier in the day.

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