Forexpros – Sugar futures declined on Monday, re-approaching the previous session’s six-week low amid speculation increased sugarcane production in Ukraine will boost global reserves, while traders continued to eye development’s surrounding Italy’s debt crisis.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.2511 a pound during European afternoon trade, retreating 0.63%.
It earlier fell by as much as 0.79% to trade at a daily low of USD0.2507 a pound. Prices hit USD0.2480 a pound on Friday, the lowest since October 7.
Ukraine’s state statistics office said earlier that the country’s sugar beet harvest as of November 1 totaled 15 million tons, up nearly 29% from the same week a year earlier.
Last week, the U.S. Department of Agriculture estimated that Ukraine’s sugar exports will rise to 217,000 tons in the 2011-12 marketing season, more than doubling the 109,000 tons exported last year.
French investment bank Natixis said in a report earlier that, “The international sugar market is likely to be well supplied in 2011-12 thanks to bumper beet and sugarcane crops in other producing countries besides Brazil.”
“These figures, combined with a potential slowdown in global sugar demand, may keep sugar price under pressure over the coming weeks,” the report added.
Meanwhile, market sentiment continued to be dominated by developments regarding Italy’s debt woes after the country auctioned EUR3 billion of five-year government bonds at an average yield of 6.29% earlier in the day, compared to a yield of 5.32% in a previous sale last month.
The auction, which was viewed as a key test of investor confidence in Italian debt, was the first after former European Commissioner Mario Monti was appointed to head a new government charged with implementing urgent reforms.
Adding to nervousness over the region’s debt crisis, Spanish government debt came under broad selling pressure ahead of next week’s general elections, with the 10-year yield rising above 6.0% for the first time since early August.
Elsewhere on the ICE Futures Exchange, cotton futures for December delivery dropped 0.99% to trade at USD0.9826 a pound, while Arabica coffee for December delivery shed 0.35% to trade at USD2.3725 a pound.
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