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Softs mixed; Coffee trades at lowest since 2009 on Brazil rainfall

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Investing.com - " U.S. soft futures were mixed on Wednesday, with coffee prices trading at the lowest level since March 2009 as favorable weather in top grower Brazil added to concerns over ample global supplies.

On the ICE Futures U.S. Exchange, Arabica coffee for December delivery traded at USD1.0700 a pound, down 0.1%. Arabica prices traded in a range between USD1.0678 a pound, the daily low and a session high of USD1.0743 a pound.

The December contract dropped to USD1.0660 a pound on Tuesday, the weakest level since March 2009, before settling at USD1.0695 a pound, down 0.56%.

Prices came under pressure after agricultural meteorologists pointed to increasing precipitation in Brazil this week, which was likely to boost crop conditions.

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

Coffee prices have been on a downward trend in recent weeks as market players continued to focus on massive global supplies.

Wall Street investment bank Goldman Sachs lowered its price forecast for Arabica coffee by almost 8% earlier in the month, citing favorable weather and ample global supplies.

Arabica prices will average USD1.2000 a pound in three-, six- and 12 months, down from a previous forecast of USD1.3000 a pound.

Meanwhile, sugar futures for March delivery traded at USD0.1847 a pound, down 0.15%. Prices of the sweetener held in a tight range between USD0.1846 a pound, the daily low and a session high of USD0.1855 a pound.

The March contract fell to USD0.1843 a pound on Tuesday, the lowest level since October 4, before settling at USD0.1845 a pound, down 2.43%.

Sugar prices have weakened in recent days amid easing concerns over a disruption to supplies from Brazil.

Prices of the sweetener rallied to a one-year high of USD0.2016 a pound on October 18, after Copersucar, Brazil's largest sugar trader, said that a fire damaged six of its warehouses at a key port in Santos, destroying nearly 180,000 tons of raw sugar.

However, prices have since lost nearly 8.5% as ship-loaders escaped damage, easing concerns over a disruption to supplies from Brazil, the world's largest producer and exporter of the sweetener.

Elsewhere, cotton futures for December delivery traded at USD0.7814 a pound, down 0.25%.

Cotton prices fell to a session low of USD0.7812 a pound earlier, the weakest level since January 18.

The December contract settled 0.39% lower at USD0.7834 a pound on Tuesday.

Cotton prices traded at the lowest level since January as favorable weather conditions in key cotton-growing states in the U.S. was likely to further boost the pace of the harvest.

Agricultural meteorologists said that drier and colder weather expected across the U.S. Midwest in the next few days will allow a resumption of active harvesting of the 2013 U.S. cotton crop.

The U.S. Department of Agriculture said Monday that approximately 34% of the U.S. cotton harvest was completed as of October 27, improving from the 21% recorded a week earlier.

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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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