Raw sugar futures closed lower for the second straight session on Thursday as a negative reversal in the price of crude oil led the march lower across the broader commodity spectrum, dealers said. The benchmark October sugar contract ended down 0.36 cent at 13.23 cents per lb on ICE Futures US, the contract's lowest level on a closing basis since August 15.
The session range was from 13.21 to 13.87 cents. Volume traded in the October contract reached 59,921 lots by 2:16 pm EDT (1816 GMT). "The losses in crude oil pushing all of the commodities down across the board." - Alex Oliveira, Newedge USA in New York.
The Reuters-Jefferies CRB index, which tracks 19 commodity futures, lost over 2 percent of its value on Thursday. On the fundamental front, the International Sugar Organisation (ISO) forecast a world sugar deficit of 3.90 million tonnes in 2008/09 compared with a surplus of 7.25 million in 2007/08.
"The distinctive global surplus phase has ended and the market is likely to move into a deficit phase," the ISO said in its quarterly market outlook. Diminished production prospects in Brazil and India should see the sugar market move into deficit in 2009 for only the second time in the last decade, Sucden analyst Karim Salamon said on Thursday.
He forecast a global sugar deficit in 2009 of 1.3 million tonnes, compared with surpluses of 9.1 million tonnes in 2008 and 8.5 million tonnes in 2007. Top producer Brazil should see mostly dry conditions with a few light showers through Sunday, with temperatures seen near to above normal - DTN Meteorlogix.
Final volumes on Wednesday surged to 134,986 lots - exchange data. Open interest in the No 11 raw sugar market slipped 4,193 lots to 816,988 open contracts as of August 27, the exchange said. The domestic No 14 sugar market saw gains of 0.02 to 0.15 cent by 2:16 pm.
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