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Softs - Coffee futures higher despite upbeat Colombian crop

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Investing.com - U.S. soft futures were mixed during U.S. morning trade on Tuesday, with coffee prices rising for the third consecutive session despite the view that global supplies of the bean are more than ample to meet demand.

On the ICE Futures U.S. Exchange, Arabica coffee for March delivery traded at USD1.4993 a pound, up 0.65% on the day. The March contract rose by as much as 0.8% earlier in the day to hit a session high of USD1.5010 a pound.

Arabica futures rallied to a three-week high of USD1.5182 a pound on January 3.

Colombia's National Federation of Coffee Growers, or Fedecafe, said Tuesday that coffee production rose to 904,000 60-kilogram bags in December, a 23% increase from 735,000 bags in December 2011.

For the full-year however, output was 7.74 million bags, 1% lower from 2011's total.

Coffee prices have been on an upward trend in recent sessions, as speculators closed out bets on lower prices after Arabica fell nearly 37% last year, the most in 12 years, making it one of the worst performing commodities of 2012.

Coffee prices tumbled to USD1.4127 on December 31, the lowest level since June 2010, amid concerns global supplies of the bean are more than ample to meet demand.

Meanwhile, sugar futures for March delivery traded at USD0.1886 a pound, down 0.25% on the day. The March contract traded in a range between USD0.1884 a pound, the daily low and a session high of USD0.1902 a pound.

Sugar futures touched a four-week high of USD0.1974 a pound on January 3.

Elsewhere, cotton futures for March delivery traded at USD0.7508 a pound, down 0.8% on the day. The March contract fell by as much as 0.9% earlier in the session to hit a daily low of USD0.7505 a pound.

Cotton futures fell to a three-week low last week after China's National Development and Reform Commission said it planned to release cotton in its state reserves to meet demand from the domestic textile industry.

However, the NDRC didn't give any details as to how much cotton would be released, or when.

Releasing cotton from its reserves could mean fewer imports and less demand for U.S. cotton. China is both the world's largest producer and consumer of the fiber.

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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.


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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