Softs mixed; sugar re-approaches 4-month high on Brazil drought

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Investing.com -

Investing.com - U.S. soft futures were mixed on Wednesday, with sugar prices re-approaching a four-month high amid speculation dry weather in Brazil will cut this year's cane crop.

On the ICE Futures U.S. Exchange, sugar futures for May delivery rose to a session high of $0.1800 a pound, before trimming gains to trade at $0.1796 during U.S. morning hours, up 1.15%.

The May contract fell 0.34% on Tuesday to settle at $0.1774 a pound.

Sugar prices have been well-supported in recent weeks, with prices advancing nearly 12% in February, amid concerns over Brazil's crop.

Brazil is the world's largest sugar producer and exporter, with the U.S. Department of Agriculture estimating the nation accounts for nearly 20% of global production and 39% of global sugar exports.

Meanwhile, Arabica coffee for May delivery was flat to trade $1.8500 a pound.

Prices of the bean lost 4.14% on Tuesday to settle at $1.8545 a pound, as investors cashed out of the market to lock in gains from the previous session's 7% rally which took prices to the highest level since March 2012.

The May coffee contract rallied to $1.9760 a pound on Monday, the most since March 6, 2012, before settling up 7.29% at $1.9345.

Prices of the bean rallied 30.4% in February as drought conditions in key coffee-growing regions in Brazil was expected to curb output. Year-to-date, Arabica coffee is up almost 41%.

Brazil is the world's largest producer and exporter of Arabica coffee.

Elsewhere, cotton futures for May delivery rose to a session high of $0.8955 a pound, the highest since February 25, before turning lower to trade at $0.8878 a pound, down 0.5%.

The May contract rallied 1.01% on Tuesday to settle at $0.8922 a pound, as frigid temperature was expected to return across parts of the U.S. Midwest in the coming days, fueling concerns over crop prospects.

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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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