Raw sugar prices ended sharply lower Tuesday on investment fund and speculative sales, although the market seems well supported and a rebound is likely this week, brokers said. The New York Board of Trade's October raw sugar contract slid 0.27 cent or 1.7 percent to conclude at 15.31 cents per lb, dealing from 15.27 to 15.57 cents.
The close in the contract matched the one-month low posted last Thursday. March fell 0.25 to 15.70 cents. The rest lost 0.20 to 0.25 cent. "The funds sold it off and then the locals followed. But we seem to have more than enough support near 15.25 and 15 (cents, basis October) so we could easily revive tomorrow," a brokerage house dealer explained.
Most analysts say supply and demand are in rough equilibrium in 2006/07. The price driver will be any surge in crude prices which could spur leading grower Brazil to funnel more cane into churning out the alternate fuel ethanol.
The market opened near unchanged and then came under steady pressure from fund liquidation. Small speculators joined the fray when they saw sugar contracts slipped down to its lows for the session, dealers said.
A dearth of cash activity has also becalmed dealings in the market. Asian sugar dealers said Pakistan is keen in selling off stocks while India could labour under the weight of record sugar output of 23 million tonnes this season. Technicians pegged support for the October contract at 15.20 and the area of 15.00/14.97 cents, with resistance at 15.75 and 15.95 cents.
Final estimated volume stood at 26,744 lots, against the previous 28,826 contracts. Call volume touched 13,529 lots and puts hit 6,765 lots. Open interest in the No 11 raw sugar market fell 435 lots to 463,845 lots as of July 24.
No deals were done in the ethanol market. US domestic sugar prices ended lower. September fell 0.20 to 22.30 cents per lb and November shed 0.08 to 22.34 cents. One contract aside, the rest eased 0.02 or 0.05 cent. Final volume amounted to 1,130 lots, from the prior tally of 118 lots.
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