Raw sugar futures crumbled from producer and speculative sales to finish lower Monday, but the sweetener is trapped in a band and will probably stay there this week, brokers said. The New York Board of Trade's October sugar contract shed 0.15 cent to close at 10.15 cents per lb, dealing from 10.06 to 10.34 cents.
March fell 0.26 to 10.49 cents. The rest declined 0.24 or 0.29 cent. The more actively traded Intercontinental Exchange NYBOT electronic market for sugar showed the key October contract down 0.13 cent to 10.17 cents at 1:25 pm EDT (1725 GMT). "It looks like we are trading between 10 and 10.50 (cents, basis October) and I don't think it's going to stray too far from that range," a dealer for a brokerage house said.
Sugar recently soared to a four-month top due to trade, fund and speculative buying caused by belief that strong crude prices will lure producers in places like top grower Brazil to use more cane in manufacturing the biofuel ethanol.
Talk of consumer buying and the steady downpours in Brazil, which could delay the harvest there and lead to a tighter supply situation, likewise boosted the market, dealers said. Sugar reeled from producer selling at the start and small speculators piled in as the market headed south. But once support emerged at the lows, the speculators were forced to cover their positions, they said.
Technicians feel resistance in the October contract was at 10.50 cents, with support in the area of 10 cents. Volume traded in the open-outcry pit around noon was 6,988 lots, from the previn trade Friday was 56,216 lots and total volume was 69,608 lots.
Open interest in the raw sugar market rose 7,579 to 686,819 lots as of July 20. Ethanol futures were untraded. There were no price indications in the US domestic electronic sugar market. Screen volume in the No 14 domestic sugar market on Friday was 286 lots and no lots were traded in the pit.
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