Soft futures – Cotton eases off 10-month top ahead of USDA

104 – U.S. soft futures were mixed during U.S. morning trade on Thursday, with cotton prices easing off the previous session’s ten-month high as investors booked profits ahead of the U.S. Department of Agriculture’s monthly report on U.S. and global fiber supplies.

On the ICE Futures U.S. Exchange, cotton futures for May delivery traded at USD0.8677 a pound, down 0.55% on the day. The May contract fell by as much as 0.7% earlier in the day to hit a session low of USD0.8672 a pound.

Cotton prices rallied to USD0.8758 a pound on Wednesday, the strongest level since May 7, amid indications of robust demand for U.S. supplies.

Cotton prices have rallied nearly 14% since the start of the year on the back of strong demand from top consumer China and concerns over U.S. supplies.

Market players were now looking ahead to Friday’s closely-watched U.S. government report on global cotton supplies, which could show an upward revision to export totals.

Meanwhile, Arabica coffee for May delivery traded at USD1.4190 a pound, up 0.7% on the day. The May contract rose by as much as 1% earlier in the session to hit a daily high of USD1.4212 a pound.

Coffee prices moved higher as traders closed out bets prices would fall lower. The May contract came under heavy selling pressure earlier in the week after the International Coffee Organization said coffee output in Brazil and Colombia will help make up for crop losses in Central America.

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

The news underlined concerns over ample global supplies and triggered a flurry of selling by long term speculators.

Elsewhere, sugar futures for May delivery traded at USD0.1825 a pound, up 0.35% on the day. The May held in a tight trading range between USD0.1812 a pound, the daily low and a session high of USD0.1827 a pound.

Prices continued to consolidate above the lowest level since August 2010 as traders were hesitant to re-enter the market amid bearish chart signals.

The sweetener fell to USD0.1788 a pound on last Friday, the lowest level since August 2010.

Sugar futures prices have been under heavy selling pressure in recent weeks as sentiment on the sweetener was dampened amid the view that global supplies are more than ample to meet world demand.

In Brazil, sugar-cane harvesting in the country’s center south, the main growing region of the world’s largest producer, will start earlier this year because of a record crop.

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.