Soft futures mixed

Soft futures were mixed on Friday with sugar, coffee and cocoa trading lower on the day, while cotton advanced.

On the ICE Futures U.S. exchange, sugar futures for October delivery fell 0.64% at 14:05 GMT. The sweetener traded at $0.1695 а pound, ranging between days high at $0.1715 and low of $0.1694 a pound respectively. Sugar settled 1.67% lower yesterday after gaining for four straight days. However, prices are still marking a weekly advance of 0.98%, which, if kept, would be the third consecutive one in June.

Sugar gained throughout last week and the previous four days following reports that demand for ethanol in Brazil rose, which made millers use 6% more cane for production of the biofuel, compared to last year’s 52%. On Tuesday, sugar prices hit $0.1748 a pound, the strongest level since May 13. Brazil accounts for 20% of global sugar production and 39% of global exports.

Meanwhile, Kingsman SA, a unit of McGraw-Hill Financial Inc.’s Platts, said for Bloomberg global sugar surplus might be 4% lower than previous estimates due to reduced output in Australia and Ukraine. “This reduced surplus is being portrayed by some as bullish but although it is a step in the right direction, a surplus is still a surplus. The past surpluses have not disappeared; the excess sugar is sitting in warehouses in China, India, Mexico and Argentina. Reductions in Ukraine and Australia have only been partially offset by increases in other producing areas estimates.” said Kingsman SA, increasing its forecast for sugar production in Belarus, South Africa and El Salvador. India may also produce more of the sweetener than forecast, up to 23-24 million tons for the 2013-2014 year from 22.3. Global sugar surplus is expected to be more than forecast in the 12 months ending in September and might total 11.87 million tons, above the previous 11.8 million tons estimate.

Coffee declines

Meanwhile, arabica coffee for September delivery crumbled to $1.1928 a pound at 14:06 GMT, marking a 2.25% daily loss. The C contract ranged between days high at $1.2268 and $1.1858 per pound respectively. Arabica has fallen throughout every week of June and is down 0.23% so far since Monday.

Elsewhere on the market, robusta coffee September futures marked a 0.80% daily loss, standing at $1 733 a ton at 14:05 GMT. Prices ranged between days high at $1 757 and $1 725 per ton respectively. Robusta, which is mainly grown in Vietnam, extended losses throughout June and is 0.52% lower so far this week.

Arabica coffee prices fell to a three-year low of $1.1717 a pound on June 20 amid concerns over ample global supplies. Both coffee sorts were under pressure recently as favorable weather conditions boosted prospects for crop development in the world’s top two producers and exporters of the two sorts – Brazil and Vietnam. According to the International Coffee Organisation, the 2012-2013 arabica production in most countries will jump 5.7%, and robusta output will rise by 8.8%.

Cotton gains

Meanwhile, cotton December futures gained on the day. The fiber traded at $0.8438 a pound at 13:57 GMT, up 0.60% on the day. Prices varied between high and low of $0.8463 and $0.8394 respectively. Cotton tumbled 6.22% last week as the stronger dollar pushed all dollar-priced commodities down and is near the even point for this week, marking a minor 0.28% decline so far. The fiber fell to a three-week low of $0.8305 a pound on Tuesday. It has recently been pressured down as concern over slowdown in demand arose from the world’s biggest consumer, China. The Asian country received a yet another downward revision of its GDP forecast by Goldman Sachs. Chinas Purchasing Managers Index is due at Monday and according to a Reuters survey it will drop to 50, compared to Mays 50.8 final reading.

In its weekly crop progress report, the U.S. Department of Agriculture said that overall last year’s crop was of better quality, compared to the current one. As of June 23, 19% of the cotton was categorized as “Very poor” and “Poor”, 34% was “Fair” and 43% was of “Good” and “Excellent” quality. Last year 16% of the crop fell in the “Very poor” and “Poor” categories, 34% in “Fair” and the remaining 50% was categorized as “Good” and “Excellent”. Investors are now looking ahead at the U.S. Department of Agriculture’s will planting and stockpiles reports, scheduled for publishing on June 28.

Elsewhere on the market, cocoa July futures stood at $1 429 a ton, down 0.21% on the day. Prices ranged between days high and low of $1 444 and $1 427 a ton respectively. Cocoa settled 3.01% lower last week and lost 6.39% the prior week. However, it is currently headed for a weekly gain, marking a 0.56% advance so far.