Forexpros – U.S. soft futures were mostly lower during early U.S. morning trade on Thursday, with sugar and coffee prices trading at the lowest level since late June as beneficial weather in Brazil improved crop prospects in the world’s largest grower of the two commodities.
On the ICE Futures U.S. Exchange, sugar futures for October delivery traded at USD0.2030 a pound, shedding 0.2%. It earlier fell by as much as 0.5% to trade at a session low of USD0.2025 a pound.
On Wednesday, front-month prices fell to as low as USD0.2017 a pound, the weakest level since June 27. The sweetener has declined in each of the past 12 trading sessions coming into Thursday.
Sugar prices rallied to a four-month high in mid-July, as fears that heavy rains in Brazil could damage sugarcane crops in the country’s center-south region boosted sentiment on the sweetener.
But the sweetener has lost nearly 15.5% since hitting USD0.2398 a pound on July 20, as beneficial weather conditions improved crop prospects throughout the region.
Brazil’s center south-region produces nearly 90% of the nation’s sugar. 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.
Sugar prices were also weighed by forecasts predicting rain in key growing regions in India, easing concerns over crop conditions in the world’s second largest producer.
Meanwhile, Arabica coffee for September delivery traded at USD1.5893 a pound, tumbling 1.8%. Earlier in the day, the September contract hit a low of USD1.5872 a pound, the weakest since June 26.
Coffee prices, like sugar, have been under pressure in recent weeks, as receding concerns over the impact of adverse weather conditions on crops in key growing regions in Brazil dampened the appeal of the commodity.
Coffee futures have lost approximately 17% since hitting a four-month high of USD1.9215 a pound on July 11.
Brazil is the world’s largest producer and exporter of Arabica coffee. Arabica is grown mainly in Latin America and brewed by specialty companies.
Market participants said that coffee prices remain vulnerable to further losses as hedge funds and large institutional investors liquidate long positions amid concerns over the global macroeconomic outlook.
Elsewhere, cotton futures for October delivery traded at USD0.7279 a pound, adding 0.1%. The October contract was stuck in a tight trading range of USD0.7296 a pound, the daily high and a session low of USD0.7256 a pound.
Cotton traders were looking ahead to the U.S. Department of Agriculture’s weekly exports sales data later in the day to gauge the strength of global demand for U.S. supplies.
The fiber is down almost 66% from a record in March 2011 as higher prices prompted farmers to plant more crops and demand in top consumer China slowed.
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