Raw sugar futures settled easier Tuesday in choppy light dealings as players seemed to be mulling the next move of a volatile market as the second quarter got started in earnest, brokers said. The May raw sugar contract declined 0.51 cent or by 3.11 percent to end at 15.89 cents per lb. Trading range from 15.80 to 16.67 cents.
May volume at 37,657 lots at 1:55 pm (1755 GMT). Last week, contract touched 11-month low at 15.46 cents. "No one has a strong position about this market," said Alex Oliveira, senior sugar analyst for brokerage Newedge USA in New York. Since scaling a 29-year top at 30.40 cents on February 1, the market has nearly halved in value in posting its worst quarterly loss since 1985.
With this mind, market digested news that Eddington Capital Management said some funds are looking past the bearish impact of large sugar crops this year. Sugar facing a lot of questions fundamentally. Trade closely watching weather conditions as the harvest gets going full bore in top producer Brazil. Many players fear excessive rains could again disrupt Brazilian cane harvest as what happened late in 2009.
Analysts also wonder if monsoon rains would be normal in leading sugar consumer India. If anything "goes wrong", prices could be headed quickly in the opposite direction - Oliveira. Demand-wise, market took note of news Pakistan would tender for 200,000 tonnes of white sugar.
Technically, many players see further weakness in the market given long positions in sugar. Support in May contract seen at 15.50 and 15 cents, with resistance at 17 and 17.50 cents. Volume traded Monday hit 65,539 lots, versus the previous tally of 211,360 lots - ICE data. Open interest in No 11 sugar was at 700,859 lots as of April 5, from the prior tally of 698,686 lots - exchange data.
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