Investing.com - U.S. soft futures were mixed during U.S. morning trade on Thursday, with coffee prices rallying to a three-week high as market players continued to close out bets on falling prices amid speculation prices may have bottomed.
On the ICE Futures U.S. Exchange, Arabica coffee for March delivery traded at USD1.5050 a pound, up 1.15% on the day.
The March contract rallied by as much as 1.6% earlier in the day to hit a session high of USD1.5118 a pound, the strongest level since December 10.
Coffee futures surged almost 4% on Wednesday, as appetite for riskier assets improved after U.S. lawmakers passed a compromise bill to avoid the fiscal cliff, blocking a series of looming tax increases and spending cuts that could have pushed the U.S. economy back into a recession
Bullish speculators are now closing 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 USD0.1962 a pound, shedding 0.35% on the day. The March contract held in tight trading range between USD0.1954 a pound, the daily low and a session high of USD0.1970 a pound.
Sugar futures touched a four-week high of USD0.1974 a pound on Wednesday.
March sugar prices rallied more than 7% since hitting a two-and-a-half-year low of USD0.1830 a pound on December 13, as market players closed out bets that prices would fall further after futures moved into oversold territory.
Elsewhere, cotton futures for March delivery traded at USD0.7589 a pound, up 0.7% on the day. The March contract rose by as much as 0.85% earlier in the session to hit a daily high of USD0.7602 a pound.
Demand for cotton, as a non-food agricultural commodity, is seen as more closely linked to economic conditions and consumer sentiment than that for other farm crops.
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