Soft futures lower, robusta resumes fall

Soft futures were mixed on Tuesday with sugar, cotton and cocoa marking losses and arabica coffee gaining. Robusta coffee continued its decline as rains in Vietnams main growing area kept improving the crop outlook. The Asian country is the worlds biggest producer and exporter of the robusta sort.

On the ICE Futures U.S. exchange, arabica coffee for September delivery rose by 0.16% for the day, standing at $1.2343 at 13:08 GMT. Prices varied between daily high and low at $1.2370 and $1.2220 per pound respectively. Arabica fell 3% this month as dry weather in Brazil, the biggest producer and exporter of the sort, accelerated harvesting.

Robusta coffee September futures lost 0.62% on the day in London, standing at $1 753 a ton at 13:09 GMT. Prices varied between days high at $1 762 and low of $1 749 a ton respectively. Vietnam is expected to have a better robusta crop than the last one.

Sterling Smith, a futures specialist at Citigroup Inc. in Chicago, said in a report for Bloomberg: “Drought conditions in the central highlands of Vietnam are no longer a factor. Our outlook for robusta is neutral to mildly bearish. Barring a weather disruption we expect prices to range from $1,700 a metric ton to $1,900 a ton.”

According to the International Coffee Organisation, the 2012-2013 arabica production in most countries will jump 5.7%, and robusta output will jump by 8.8%.

Sugar falls

Meanwhile, sugar dropped 0.12% on the day, standing at $0.1679 at 12:54 GMT. The sweetener varied between days high and low at $0.1689 and $0.1666 respectively. Sugar prices fell to a three-year low of $0.1617 a pound last week, as farmers in Brazil accelerated harvesting of the nations sugar crops. Prices experienced some support later as millers used more cane to produce biofuel, instead of the sweetener.

Cotton plunges

Cotton futures for December delivery tumbled 1.43% on the day to trade at $0.8772 a pound at 13:08 GMT. Prices varied between daily high and low at $0.8866 and $0.8742 respectively.

According to the USDA weekly crop progress report on Monday, as of June 16 95% of the U.S. cotton crop was planted, compared to 88% in the preceding week. This is close to last years 98% and the five-year average 97%. As for the crop condition, 19% was categorized as “Very poor” and “Poor”, 39% was “Fair” and 42% was “Good” and “Excellent”, which is overall worse than last years crop state.

Last week, the U.S. Department of Agriculture trimmed its cotton crop forecast by 3.6% to 13.5 million bales, compared to its previous estimate of 14 million bales. Cotton gained 13% this year as global production is expected to slip 4.8% in the season starting August 1, while demand will increase by 2.3%, according to the International Cotton Advisory Committee.