Raw sugar prices settled easier on Thursday on producer and speculative sales as the market again faltered at the top, and values may eventually tumble in the days ahead, brokers said.
The New York Board of Trade's March raw sugar contract slipped 0.08 cent to end at 11.82 cents per lb, dealing from 11.80 to 12.08 cents. May lost the same to 11.96 cents. The rest lost from 0.08 to 0.10 cent.
Marius Sonnen of Sonnen and Co said producer sales were plentiful when the March contract raced past 12 cents and that capped sugar's initial advance. "I think we're just going back to 11 cents," he said, adding bearish fundamentals and the market's technical failure at the top may eventually depress values.
Fundamentally, the market is hemmed in by bountiful supplies for 2006/07 while demand has been less than sterling to begin with. Those holding bullish views feel all the bearish news is already in the market and sugar should stabilise and begin staging a modest increase.
From the opening bell, sugar jumped mainly on speculative buying as it took its inspiration from the strong tone of white sugar prices in London, dealers said.
But producer pressure put a "cap on the market," Sonnen said, and the inability to extend the rise drove sugar into negative territory. Technicians believe resistance for the March contract is at 12 and 12.05/08 cents, with support in the region of 11.47/50 and then down to 11 cents.
Volume before the close stood at 26,325 lots, from the previous count of 28,507 lots. Call volume reached 10,520 lots and puts amounted to 3,117 lots. Open interest in the No 11 raw sugar market jumped 6,690 to 463,863 lots as of October 25.
No deals were done in the ethanol market. US domestic sugar prices settled lower. The January contract fell 0.19 to 20.05 cents per lb and March slid 0.29 to 20.04 cents. The rest tumbled from 0.05 to 0.30 cent. Volume before the end of business hit 404 lots, from the prior tally of 174 lots.
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