November 29th 2012

Sugar Futures – U.S. soft futures were higher during U.S. morning hours on Thursday, with sugar and coffee prices firming as top producer Brazil’s harvest of both commodities begins to wind down.

On the ICE Futures U.S. Exchange, sugar futures for March delivery traded at USD0.1925 a pound, up 0.7% on the day. The March contract rose by as much as 1.4% earlier in the session to hit a daily high of USD0.1939 a pound.

Brazil’s top sugar industry group Unica said on November 26 that sugar output in Brazil’s Center South-region jumped 37% in the first two weeks of November compared to the same period a year earlier.

Output in the region totaled 1.74 million metric tons between November 1  and November 15.

The industry group added that Sugar mills in the region will begin to shut down in greater numbers in the coming weeks as harvest comes to a close.

Brazil’s Center South-region produces nearly 90% of the nation’s sugar. 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.

Meanwhile, Arabica coffee for March delivery traded at USD1.5420 a pound, adding 0.2%. The March contract rose by as much as 1.1% earlier in the session to hit a daily high of USD1.5562 a pound, the strongest level since November 20.

Despite recent gains, the commodity has been under heavy selling pressure in recent months, losing nearly 11% since the beginning of October as concerns over the pace of the Brazilian coffee harvest eased.

Front-month prices dropped to a two-year low of USD1.4440 a pound on November 15.

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

Elsewhere, cotton futures for March delivery traded at USD0.7347 a pound, jumping 1.15%. The March contract rallied by as much as 1.3% earlier to hit a session high of USD0.7356 a pound, the strongest since November 16.

- Forexpros