Meanwhile, cotton prices traded close to a three-week high, as sentiment on the fiber has improved in recent sessions, while sugar futures fell, moving further away from a three-week high hit earlier in the week.
Farm commodity traders continued to monitor rising borrowing costs in Spain and Italy, as well as weekend elections in Greece, which could determine the course of the country’s future in the euro zone.
On the ICE Futures U.S. Exchange, Arabica coffee for July delivery traded at USD1.5155 a pound, shedding 0.4%. It earlier fell by as much as 0.8% to trade at USD1.5097, the lowest since mid-2010.
Coffee prices have been under pressure in recent months, losing nearly 37% since mid-January as traders eyed a huge harvest in top grower Brazil and speculators pushed prices lower.
Jitters over the global economic outlook have weighed on soft commodities in recent weeks.
Meanwhile, sugar futures for July delivery traded at USD0.1984 a pound, slumping 0.8%. It earlier fell by as much as 0.9% to trade at a session low of USD0.1982.
Prices touched a three-week high of USD0.2061 a pound on June 12.
Sugar prices have gained approximately 5% since dropping to a two-year low of USD0.1886 a pound on June 4, as concerns that heavy rains in Brazil could damage sugarcane crops in the country’s center-south region boosted sentiment on the sweetener.
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.
However, market participants were wary of pushing prices higher, as the sugar market remains in a major bear trend.
Elsewhere on the ICE Futures U.S. Exchange, cotton futures for July delivery traded at USD0.7589 a pound, climbing 1.1%. It earlier rose by as much as 1.25% to trade at a session high of USD0.7609 a pound.
Prices rose to a three-week high of USD0.7639 a pound on June 12, after the U.S. Department of Agriculture reduced its estimates for worldwide cotton output in the 2012-13 season, starting August 1.
In its World Agricultural Supply & Demand Estimate report published earlier in the week, the USDA said that a steep drop in cotton prices will lead to lower production from Southern Hemisphere growers like Brazil, as well as Australia and Argentina.
Prices slumped to a 32-month low of USD0.6617 a pound on June 4. But futures have been on an uptrend in recent sessions, gaining nearly 13% since then.
The fiber lost nearly 25% in May, as large hedge funds liquidated positions and speculators pushed prices lower amid concerns over the global economic outlook.
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.