New York sugar futures modestly lower, consolidation seen

Raw sugar futures closed softer on Wednesday on speculative sales, but market operators said they feel the sweetener should consolidate in the coming sessions, especially given its bullish outlook. The New York Board of Trade's October sugar contract lost 0.11 cent to finish at 9.41 cents a lb, in a band from 9.37 to 9.55 cents. March shed 0.10 to 9.53 cents. The rest fell from 0.05 to 0.09 cent.
"It was still fund liquidation, with the trade buying all the way down," a brokerage house analyst said. "The fundamentals are still good though and you could see pretty good buying from China and Pakistan so we should consolidate."
Sugar had embarked on a rally, which hoisted prices to their highest level in nearly 4-1/2 years, bolstered by news of sizeable purchases by Pakistan, China, Russia and India.
Analysts said sugar prices will likely challenge the psychologically vital 10 cents level before the end of 2005 given the strong level of consumer interest in sugar.
Futures edged higher at the start but that move soon petered out when fund accounts opted to dump the market throughout the session, floor sources said.
"The locals just kept leaning on it but the trade and the importers were there to take advantage of this downturn so I really don't see the market going down too sharply," a floor dealer said.
Technicians put support in the October contract at 9.25 cents, with resistance at 9.55 and then the contract high of 9.62 cents.
Volume traded prior to the close of business hit 23,381 lots, below the prior tally of 35,075 lots. Call volume stood at 1,625 lots and puts amounted to 2,874 lots.
Open interest in the No 11 raw sugar market slid 5,048 lots to 410,328 contracts as of July 19.
Ethanol futures were untraded for the 13th day in a row, with no quotes seen in the spot September contract.
US domestic sugar futures ended sharply lower. September plunged 0.65 cent to 21.40 cents a lb while November sank 0.12 to 20.60 cents. Except for one contract, the rest lost 0.01 to 0.04 cent. Volume done before the end of trade hit 158 lots, against the prior 309 contracts.