FRX: Sugar futures ease off 1-month low after Brazil crop update
Forexpros - U.S. soft futures were mixed during U.S. morning trade on Thursday, with sugar prices easing off a one-month low amid growing speculation rain would return to key growing regions in Brazil and disrupt harvesting.
On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1977 a pound, adding 0.3%. The March contract rose by as much as 0.5% earlier in the session to hit a daily high of USD0.1994 a pound.
Front-month prices slumped to USD0.1945 on Wednesday, the cheapest level since September 21.
Sugar’s gains came despite an upbeat crop progress report from leading sugar industry group Unica on Wednesday, which said sugar output in Brazil’s Center South-region jumped 57% in the first half of October.
Output in the region rose to 2.79 million metric tons between October 1 and October 15 from 1.78 million a year earlier
Sentiment on the sweetener has turned negative since hitting a two-month high of USD0.2176 a pound on October 4, amid receding concerns over the pace of the harvest in Brazil’s Center South-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.
Meanwhile, Arabica coffee for December delivery traded at USD1.6003 a pound, gaining 0.3%. The December contract traded in a range of USD1.6182 a pound, the daily high and a session low of USD1.5993 a pound.
December coffee futures fell to a six-week low of USD1.5717 a pound on October 18.
Coffee futures have been under heavy selling pressure since touching a ten-week high of USD1.8542 a pound on October 3, as concerns over the pace of the Brazilian coffee harvest eased.
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 players said that an anticipated rebound in Colombia's crop further weighed and added to view that global supplies of the bean are more than ample.
Elsewhere, cotton futures for December delivery traded at USD0.7255 a pound, dropping 0.2%. The December contract retreated by as much as 0.35% earlier in the session to hit a daily low of USD0.7247 a pound.
The fiber fell to USD0.7042 a pound on October 11, after the U.S. Department of Agriculture increased its estimate for 2012-13 global ending stocks to a record high.
