Arabica coffee was largely unchanged, settling at 172.98 cents a pound on ICE Futures U.S. by midweek, and largely flat on last week’s close. Robusta coffee futures on London’s NYSE Liffe finished at $2,056 a tonne at midweek, $29 below the seven-week high of $2,085 a tonne reached on July 3, supported by tightening certified stocks.
Raw sugar futures on ICE slipped to a 4⅟2-month low of 17.16 cents a pound on July 10 on expectations that data from Brazil’s sugar cane industry association, Unica, will confirm a fast cane crush amid dry weather in the second half of June in top producer Brazil’s Center-South region. White, or refined, sugar for August delivery on NYSE Liffe was also lower, finishing at a four-week low of $459.20 a tonne on July 9.
ICE cotton tumbles to two-year lows
Cotton prices on ICE Futures U.S. continue to weaken, tumbling to two-year lows this week, amid improved output prospects for top producer and exporter, the U.S., and expectations of a sharp decline in imports by the biggest consumer, China.
The benchmark December cotton contract on ICE Futures U.S. slipped below the key 70 cents a pound level to a low of 68.51 cents on July 10, the weakest in more than two years. The previous day, December ICE cotton had finished at 69.67 cents. In late March, ICE cotton futures had traded at over 97 cents a pound, their highest level since February 2012, supported by tightening global supplies of the fiber.
But the arrival of rains in the U.S.’ biggest cotton producing state, Texas, in recent weeks after prolonged drought, has led to expectations that the U.S. Department of Agriculture (USDA)in its latest World Agricultural Supply and Demand Estimates Report (Wasde) report on July 11 will raise its forecast for U.S. cotton production for the 2014-2015 crop year which begins Aug. 1.
The country’s cotton growers planted 9.3 percent more acres – some 11.4 million acres – with cotton this spring than they did in 2013, according to the USDA Acreage report released June 30. The U.S. harvested its smallest cotton crop in four years in this current crop year, which ends July 31.
China’s imports of cotton in 2014-2015 are also expected to fall sharply as the country’s government moves to end its cotton stockpiling program and replace it with direct subsidies to farmers.
The stockpiling made it generally cheaper for Chinese mills to import cotton than to buy domestically-produced fiber and has helped to support the global cotton market and prices for the past three years. China as a result now is holding more than half the global cotton inventory. Beijing has indicated the new subsidy system will likely start after the country’s autumn harvest.
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