Raw sugar futures finished sharply lower on Monday on investor liquidation as part of a correction from a three-year top, but short-covering pruned the market's losses, brokers said. The market was closed Friday for US Independence Day. The key October raw sugar contract fell 0.26 cent to finish at 17.32 cents per lb. The contract moved between 16.96 and 17.48 cents.
Volume traded in the October contract stood at 48,657 lots at 2:05 pm EDT (1805 GMT). March sugar lost 0.21 cent to end at 18.36 cents. Ralph Preston, an analyst at HeritageWestFutures.com in San Diego, California, said sugar was undergoing a correction after prices peaked at their highest in three years last week over 18 cents a lb in the New York raw sugar market.
"It's important to see how the market behaves at this level," he said, adding a fall to 16.72 cents would keep intact the bullish outlook for raw sugar futures. A rebound from that area over the next few sessions means raw sugar futures may stage "another challenge" of levels around 18.10 cents in the October contract, Preston said. "I'm going to (have to) keep my eye on sugar," he added.
Traders said the sugar market badly needed to pull back because it was overbought and the rally had decimated consumer interest in booking orders for the sweetener. Fundamentally, trader-consultant FCStone said Brazil's center-south sugar cane crush is expected to reach 554 million tonnes, up 9.7 percent from 2008/09. It said sugar production could rise 20.7 percent to 32.3 million tonnes from 26.8 million tonnes last season as mills use more cane to produce sugar because of higher returns.
Russian raw sugar imports jumped in May to 348,800 tonnes vs 24,300 tonnes in April, customs data showed. Technicians put resistance in October delivery at 18 and 18.50 cents, with support at 17 and 16.80 cents. Volume traded Thursday in the No 11 sugar market was 52,918 lots, from the prior 69,193 lots - the exchange said.
Comments
Comments are closed.