Soft futures – Cotton eases off 10-month high on profit-taking


U.S. soft futures were mixed during U.S. morning trade on Monday, with cotton prices easing off the previous session’s ten-month high as investors booked profits after 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 USD0.8606 a pound, down 0.95% on the day. The May contract fell by as much as 1.2% earlier in the day to hit a session low of USD0.8586 a pound.

Cotton prices rallied to USD0.8874 a pound on Friday, the strongest level since May 4, after the USDA said world cotton reserves will be lower than forecast a month ago as demand increased in China ,India and Bangladesh.

According to the USDA, global inventories will total 81.74 million bales in the year ending July 31, down from the February estimate of 81.86 million bales.

Global demand was estimated at 107.11 million bales, up from 106.24 million last month.

The agency increased its estimate for projected consumption by top consumer China to 36 million bales from 35.5 million last month.

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.

Meanwhile, sugar futures for May delivery traded at USD0.1884 a pound, up 0.8% on the day. The May contract rose by as much as 0.95% earlier in the session to hit a daily high of USD0.1886 a pound.

The sweetener jumped to USD0.1904 a pound on Friday, the highest level since January 14.

Sugar prices rallied almost sharply last week as shipping delays out of top producer Brazil and a move towards higher ethanol production have triggered short-covering buying.

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.

Elsewhere, Arabica coffee for May delivery traded at USD1.4350 a pound, down 0.5% on the day. The May contract held in between a tight trading range of USD1.4393 a pound, the daily high and a session low of USD1.4328 a pound.

Coffee prices came under pressure as striking coffee growers in Colombia ended an 11-day protest on Friday after winning a government subsidy to offset lower prices for their product on international markets.

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