New York sugar finishes at eight-month low

Raw sugar prices closed on Friday at its lowest level in eight months as commodity fund sales hammered the market and further pressure could lead to lower values next week, brokers said.
The New York Board of Trade's October raw sugar contract slid 0.53 cent or by 3.8 percent to conclude at 13.36 cents per lb, near the bottom of its 13.32 to 13.68 cents band. It was the worst close for the contract since ending at 13.39 cents on December 7.
March dove 0.49 to 14 cents. Distant months lost from 0.37 to 0.50 cent. "We have funds going short the market," said James Cordier of Florida-based Liberty Trading Group, alluding to the rising open interest in the sugar market. Open interest in the No 11 raw sugar market rose 3,185 lots to 475,410 lots as of August 10.
Cordier said the market should find some support at 13 cents but floor sources said the contract could eventually slide all the way to 12.50 cents. Fundamentally, the market took note of news that Societe J. Kingsman raised its forecast for the 2006/07 global sugar surplus to 3.3 million tonnes from its prediction in April of a surplus of 1.2 million tonnes.
The main reason would be increases in production in India, China and Thailand.
Floor sources said sugar buckled from the opening bell as commodity funds and speculative accounts sold sugar, with automatic sell orders kicking in below 13.50 cents, basis October.
"It's all fund (selling) although the trade seemed to be there at the lows. It still looks weak so we feel it gets below 13 and maybe tries for 12.50 (cents)," a floor dealer said. Technicians see support for the October contract at 13 and 12.50 cents, with resistance at 13.60 and 14.20 cents.
Volume before the close stood at 58,070 lots, from the previous 42,857 lots. Call volume reached 27,874 lots and puts amounted to 16,796 lots. No deals were done in the ethanol market. The US domestic sugar prices closed lower. November lost 0.15 cent to 21.20 cents and January shed 0.05 to 21.21 cents. Two contracts aside, the rest fell 0.10 to 0.13 cent. Volume traded before the end stood at 564 lots, from the prior tally of 255 lots.