Soft commodities were dropping in value on Tuesday as additional tradables on the commodity complex also slipped, according to Reuters.
Concerns about Spain preparing to postpone bailout aid for its debt-hobbled banks and public finance systems drew worries back to the sovereign debt crisis and the damages it has wrought. Less than one week after the U.S. Federal Reserve announced a third round of quantitative easing, concern continues to ring loud about the state of the globe's financial health.
"I think what we're seeing is that the initial support that some of the softs markets got following the announcement of QE3 has petered out at this point," commodities analyst Sudakshina Unnikrishnan with Barclays Capital told Reuters. "The broad-based weakness is primarily on a slightly more cautious attitude on risk."
At 2 p.m., cocoa futures dropped 2.01 percent, a $52 loss $2,532 per metric ton. Coffee futures gained 1.05 percent, a 0.0185 cent loss to $1.775 per pound. Sugar futures fell 3.03 percent, a 0.0063 cent loss to 20.15 cents per pound.
Bloomberg reports two-year notes issued by Spain remained low following an auction as commodities lost value.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.