Soft futures mixed, cocoa advances

Soft futures were mixed on Wednesday with coffee marking daily losses, while cotton and sugar remained fairly unchanged near their previous close and cocoa advanced amid speculation over crop delays.

On the NYSE LIFFE cocoa futures for July delivery traded at $1 475 a ton, up 1.65% on the day. Prices ranged between days high and low at $1 480 and $1 452 respectively. Cocoa has gained more than 1.7% this week after settling 1.48% last week.

Cocoa advanced for a second day amid speculation the next harvest will be delayed in the worlds largest growing region – West Africa. MDA Services in Gaithersburg, Maryland reported yesterday that weather in eastern Ivory Coast, the leading producer, is dry and more rain is needed in the second largest producer, Ghana. Moderate rain is expected this week.

Eric Sivry, head of agriculture options brokerage at Marex Spectron in London said for Bloomberg: “The recent rain levels in Ghana were not as good as in Ivory Coast. Traders also expressed a fear that current settings may be indicating a late start of the main crop.”

Coffee declines

Both arabica and robusta coffee declined on Wednesday. On the NYSE LIFFE robusta for September delivery fell to $1 812 a ton at 12:50 GMT, marking a 0.71% daily loss. Prices ranged between days high and low of $1 820 and $1 795. The sort that is mainly grown in Vietnam has gained more than 3.3% this week after settling 1.03% higher last week.

Robusta rose to the highest in three weeks yesterday amid speculation prices fell last quarter too much, while stockpiles in Europe declined and premiums in growing countries were high. The sort that is mainly grown in Vietnam fell 14% between April and June, which is the worst quarter since Q3 2011. Meanwhile, stockpiles, monitored by the NYSE LIFFE, fell by 1.3% in the two weeks to June 24.

On the ICE Futures U.S. Exchange, arabica coffee for September delivery traded at $1.2140 a pound at 12:50 GMT, down 1.92% on the day. Prices ranged between days high and low of $1.2340 and $1.2093 respectively.

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%.

Sugar unchanged

Sugar remained unchanged on the day by 12:42 GMT. Sugar October futures traded at $0.1652 a pound, marking a 0.00% change. Prices ranged between days high and low of $0.1656 and $0.1647 a pound. The sweetener lost more than 2% so far this week after settling 0.63% higher the last one. Sugar fell to a two-week low of $0.1645 a pound on Tuesday, as farmers in Brazil started to accelerate harvesting of the nations sugar crops.

Last week, 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. Kingsman increased 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.

Cotton posts minor losses

Cotton fell slightly on Wednesday, marking a 0.07% daily loss by 12:45 GMT. Cotton December futures traded at $0.8466 a pound, ranging between days high and low of $0.8520 and $0.8460 respectively. The fiber gained almost 0.5% so far this week after settling 0.26% lower last week and 6.22% the week before.

In its acreage report on Friday, the U.S. Department of Agriculture said all cotton planted area for 2013 is estimated at 10.3 million acres, 17% below compared to last year. However, the fiber was recently pressured down as concern over a 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 last week and its latest PMI data also showed worsening compared to May’s figures. Another Chinese PMI report today showed a poorer performance by the country’s economy in June, compared to May. China’s non-manufacturing PMI dropped to 53.9, down from 54.3 in May.

In its weekly crop progress report on Monday, the USDA said that cotton squaring fell behind last year’s pace with figures standing at 37% as of June 30, compared to 47% last year and below the five-year average of 45%.

The government agency also reported that crop condition was overall the same like last year’ s. As of June 30, 2013 17% of the cotton crop fell in the “Very poor” and “Poor” categories, 36 in “Fair” and 47 in “Good” and “Excellent”. During the comparable week last year, 18% of the nation’s cotton was of “Very poor” and “Poor” quality, 35% was “Fair” and the remaining 47% was categorized as “Good” and “Excellent”.