ICE raw sugar futures closed at a one-month low on Monday as investors continued to limit their exposure in the market following last week's surge through 15.00 cents, brokers said. "I think you're seeing people cutting back some of their exposure in certain markets that have rallied more strongly," said one dealer at a New York brokerage house.
The ICE Futures May electronic sugar contract settled down 0.32 cent at 13.04 cents per lb, its lowest settlement since February 12, after moving between 12.81 and 13.29 cents.
By 1:56 pm EST (1856 GMT), May sugar was down 0.23 cent at 13.13 cents. ICE futures US agricultural futures contracts have been trading solely on the electronic platform since March 3. Daily settlement times remain the same as what they were during the former open-outcry session, though contracts continue to trade electronically until 3:15 pm.
Technically, the market's ability to hold above on Friday's low of 12.77 and settle above the 13.00-cent were two positive developments that could potentially bring in another round of buying.
"Psychologically, it does perhaps give the market a boost," one trader said, adding that the higher crude oil prices also helped sentiment. "That shows that the overall commodity index interest has not diminished," he said. Looking at the charts, technicians see initial support in the May contract at Friday's low of 12.77, followed by 12.50.
Resistance was pegged at 13.80 to 13.85 cents and then 13.90 to 14.00 cents. Sugar prices, which have surged this year on speculative investment fund buying, have disconnected with market fundamentals but should readjust to match supply and demand, merchant ED&F Man said on Monday.
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