NYBOT raw sugar futures reeled from a barrage of fund profit-taking and producer sales to settle weakly on Friday, scuttling a rally that hoisted the sweetener to its best level since early June, brokers said.
July sugar slid 0.42 cent or by 5.8 percent to finish on Friday at 6.82 cents a lb., moving from 6.70 to a year high of 7.34 cents. October, the new benchmark contract, dove 0.37 cent to end at 7.38 cents after posting a contract peak of 7.85 cents. Distant months dove 0.17 to 0.32 cent.
James Corridor, an analyst for Liberty Trading Group, said sweetener values crumbled when producer sales capped the market and then the funds "ran to the exit door all at the same time." Judy Ganges of J. Ganges consulting said sugar sank especially hard from the automatic sell programs the funds had in the market.
"We probably will see a further downward correction (next week)," she said. Fundamentally, there was no reason for the market to march higher although the longer-term outlook for sugar seems rosier given expectations of higher demand from key importers like China and India, especially in 2005.
Follow-through fund buying catapulted sugar to its highest level in a year, but the producers piled in and funds who had ridden the rally opted to grab the cash on the table by pocketing their profits, dealers said.
"The weekend was coming up so some of these people wanted to go home with their money. The way it closed, we could head lower next week," one said. As to switch trade, July open interest dropped 9,426 lots to 59,916 lots as of June 17 while interest in October surged 10,087 to 146,171 lots.
Technicians feel resistance in the active October contract would be at 7.60 and 7.65 cents, with support at 7.25 cents. Final estimated volume was at 75,926 contracts, from the prior tally of 73,669 lots.
Call volume hit 17,324 lots while puts touched 9,194 lots. Open interest in the No. 11 sugar market rose 1,671 to 286,581 lots as of June 17. Ethanol futures all ended a touch firmer with the June ethanol contract rising 0.40 cent to 83.90 cents a gallon. Open interest in the ethanol market rose 5 to 497 lots as of June 17.
On Thursdays traded volume stood at 5 lots. US domestic sugar prices finished easier on Friday.
September lost 0.03 to 19.95 cents a lb. while November shed 0.06 cent to 20.39 cents.
Except for one contract, the rest slipped 0.01 or 0.02-cent. Final traded volume was 403 lots against the previous 364 lots.
Comments
Comments are closed.