New York sugar extends losses from funds to end lower

Raw sugar futures settled easier on Wednesday on another round of commodity fund sales and the poor finish may lead to further losses before the end of the week, brokers said.
The New York Board of Trade's May raw sugar contract slumped 0.56 cent or 3.3 percent to finish at 16.62 cents a lb, near the bottom of its 16.56 to 17 cents band. July fell 0.52 to 16.33 cents. The rest lost from 0.48 to 0.50 cent.
"I think the market's topped out," said James Corridor of Liberty Trading Group, adding a fall in the key May contract below 16 cents may zap cash business as consumers wait for further falls before stepping back into the pit.
Commodity funds, which jacked up values in sugar and goods like metals to 25-year highs this year, appear to be exiting their positions, focusing on a firmer dollar and interest rate. The fall in the broad-based CRB Commodity index to a year low of 316.06 points weighed as it showcased the selling by commodity funds across the board.
The longer-term fundamentals for sugar are bullish since supplies will fall short of demand at a time when cane in leading grower Brazil will be devoted to the production of the biofuel ethanol. Sugar contracts tumbled from the bell, weighed down by fund sales before some consumer and trade buying supported the market just in front of 16.50 cents, basis the spot may contract.
"The funds are unloading on the market, but you're sort of cautious because you could start seeing substantial support before 16 cents in May," a long-time financial house dealer said. Technical analysts feel resistance in the May contract is now at 17 cents, with support at 16 cents.
Volume before the end of trade hit 37,422 lots, from the previous tally of 48,209 contracts. In the options ring, call volume hit 12,567 contracts and put volume was at 6,168 lots. Open interest in the No 11 raw sugar market rose 1,502 lots to 458,466 lots as of March 7.
There were no deals in the ethanol market. US domestic sugar prices ended lower. The May contract sank 0.37 cent to 22.38 cents a lb while July fell 0.35 to 22.46 cents. One contracts aside, the rest lost from 0.10 to 0.31 cent.
Volume done before the close stood at 208 lots compared with the previous 383 lots.