Forexpros – U.S. soft futures were mostly higher during early U.S. morning trade on Monday, with sugar prices climbing to the highest level since mid-April amid growing concerns over crop conditions in top growers Brazil and India.
Meanwhile, coffee prices edged lower in thin rangebound trade, while cotton prices were higher as investors reacted to data showing deteriorating crop conditions in the U.S.
On the ICE Futures U.S. Exchange, sugar futures for October delivery traded at USD0.2286 a pound, climbing 1%.
It earlier rose by as much as 1.1% to trade at USD0.2289 a pound, the highest since April 18.
Sugar prices have rallied in recent sessions 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 top sugar industry group Unica said last week that 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.
Sugar traders were also monitoring crop conditions in India, where a poor monsoon season has weighed on the quality of the crop.
Market participants noted that the sugar market remains in a major bear trend. Prices are down approximately 37% since hitting a three-decade high of USD0.3594 in February of last year.
Meanwhile, Arabica coffee for September delivery traded at USD1.8107 a pound, easing down 0.25%. The September contract traded in between a tight range of USD1.8182 a pound, the daily high and a session low of USD1.8022.
Prices hit a two-month high of USD187.00 on July 5, 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.
Despite recent gains, coffee prices have been under pressure in recent months, losing nearly 26% 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.
Elsewhere, cotton futures for October delivery traded at USD0.7082 a pound, adding 0.65%. It earlier rose by as much as 1.4% to trade at a session high of USD0.7142 a pound.
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 44% of the crop was rated in ‘good’ to ‘excellent’ condition as of July 8, down from 47% a week earlier.
In the major producing state of Texas, 35% of the cotton crop was seen as in ‘good’ or ‘excellent’ health, unchanged from 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.
Front-month prices slumped to a 32-month low of USD0.6617 a pound on June 4.
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