Sugar fell to its weakest level since August 9, 2010. The reason lies in the forecast for a record harvest of 589.6 million metric tons of sugar cane in Brazils center-south region, where around 90% of the countrys production is situated. Millers crushed 31.5 million tons of cane in the second half of April compared to 9,4 million tons a year earlier. Brazil is the worlds biggest sugar producer and accounts for 20% of the global production and 39% of sugar exports. A surge in cane processing is also expected in Thailand – the second-biggest exporter.
Cotton futures for July delivery dropped 0,7% for the day. The May contract fell by 0,8% earlier in the day. Market observers are monitoring closely the U.S. planting prospects.
Meanwhile Arabica coffee shows almost no change in trading prices, following a steep drop on Wednesday, based on the strong dollar, which put downward pressure on the commodities. Dollar weakness generally benefits commodities as it makes them more attractive to investors. Another reason for the heightened interest in them is the fact they are a dollar-priced and a weaker dollar makes them cheaper for foreign currency holders. Reverse logic counts for the opposite case.
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