New York sugar softens

Raw sugar futures settled Tuesday trading at a fresh four-month low on commodity fund sales but robust trade and consumer buying pared the market's losses for now, brokers said. The New York Board of Trade's March raw sugar contract shed 0.04 cent to end at 10.55 cents per lb, in a band from 10.35 to 10.57 cents.
It was the lowest finish for sugar on a spot daily basis since trading near 10.50 cents in late September 2006. May eased 0.05 to 10.75 cents. The rest of the board declined from 0.02 to 0.06 cent. "The funds really sold it hard although it bounced pretty good when the trade buying showed up. It still looks weak to me and the feeling is that we go lower," a floor analyst said.
Fundamentally, supplies are plentiful and the market will soon be focusing on the looming harvest of the main center-south cane crop of top grower Brazil in April.
Open interest in the No 11 raw sugar market continued to rise at a steady clip, which dealers feel is a sign that investment, hedge and pension funds are increasing their short positions in sugar.
Those short positions mean those funds are betting that prices will slip. Open interest in the No 11 raw sugar market rose 3,267 lots to 671,894 contracts as of January 29. Sugar contracts lost ground from the opening bell, swiftly falling below the key 10.50 cents level in the March contract and not rebounding until trade and consumer buying showed up at the lows, traders said.
"It (the sugar market) came back pretty good late in the day, but no one is entirely confident this market will be able to hold," one explained.
Technicians feel support for the March contract was at 10.30 and 10 cents. Resistance was at 11 and 11.15 cents. Volume before the close stood at 69,882 lots, from the prior count of 49,007 lots. Call volume stood at 8,457 lots and puts hit 4,078 lots.
Ethanol futures were untraded. US domestic sugar prices ended higher. The March contract rose 0.13 to 20.23 cents per lb and May went up 0.10 to 20.05 cents. Back months added from 0.04 to 0.16 cent. Deals before the end reached 1,156 lots, from the previous count of 353 lots.