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Soft futures mixed - Coffee bounces off 34-month low

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Investing.com - U.S. soft futures were mostly higher during U.S. morning trade on Thursday, with coffee prices bouncing off the previous session's 34-month low amid concerns over shipping delays out of top producer Brazil and as investors returned to the market to seek cheap valuations.

On the ICE Futures U.S. Exchange, Arabica coffee for May delivery traded at USD1.3388 a pound, up 0.8% on the day. The May contract rose by as much as 1.2% earlier in the day to hit a session high of USD1.3445 a pound.

The May contract fell to USD1.3207 a pound on Wednesday, the lowest level since June 2010.

Coffee prices have been under heavy selling pressure in recent weeks, losing nearly 10% since hitting a one-month high of USD1.4747 a pound on March 5, as speculators pushed prices lower amid worries over sufficient global supplies.

The International Coffee Organization said last month that coffee output in Brazil and Colombia will help make up for crop losses in Central America.

Brazil is the world's largest producer and exporter of Arabica coffee, while Colombia is the world's second largest. Arabica is grown mainly in Latin America and brewed by specialty companies.

Meanwhile, sugar futures for May delivery traded at USD0.1847 a pound, up 0.7% on the day. The May contract rose by as much as 0.8% earlier in the session to hit a daily high of USD0.1848 a pound.

Sugar prices remained supported amid ongoing concerns over shipping delays out of top producer Brazil.

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.

Elsewhere, cotton futures for May delivery traded at USD0.8886 a pound, down 0.3% on the day. The May contract was stuck in a range between USD0.8871 a pound, the daily low and a session high of USD0.8909 a pound.

Cotton prices fell more than 2% on Wednesday to hit a one-week low of USD0.8824 a pound, as news that top producers India and China will release cotton from government stocks spurred profit-taking.

Cotton prices have been well-supported in recent months, rallying nearly 17% since the start of the year on the back of strong demand from top consumer China and concerns over U.S. supplies.

Cotton futures jumped to an 11-month high of USD0.9384 a pound on March 15.

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The views and opinions expressed herein are the views and opinions of the author and do not necessarily reflect those of Nasdaq, Inc.

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