Raw sugar futures settled near their session lows on Wednesday as funds continued to liquidate amid a downturn in sentiment tied to the news of a commodities-focused hedge fund closure, brokers said. Trading ranged from 12.50 cents to 12.75 cents. Volume traded in the October contract hit 40,012 lots by 3:10 pm EDT (1910 GMT).
Sugar weakened under the weight of an ongoing downturn in the broader commodities spectrum, sparked by continued losses in the price of crude oil and a firmer tone in the US dollar - broker. "Once again, we are seeing fund liquidation" - Alex Oliveira, with Newedge USA in New York. "The Lehman news is pushing everything down."
Hedge fund manager Ospraie Management LLC will close its flagship fund after it plunged 27 percent in August on losses in energy, mining and natural resources equity holdings, in one of the biggest ever closures of a commodities-focused hedge fund.
The domestic No 14 sugar market continued to move higher this week in the aftermath of Hurricane Gustav.The November contract was up 0.20 cent at 23.60 cents by 3:10 pm. The extent of Hurricane Gustav's damage to Louisiana's sugar cane crop was still unknown as rain continued to fall, the American Sugar Cane League (ASCL) said Wednesday.
Top producer Brazil is forecast to experience mostly dry conditions through Sunday, with the chance of a few light showers possible on Saturday. Temperatures are expected to be near to above normal - DTN Meteorlogix. Final volumes on Tuesday reached 122,772 lots - exchange data. Open interest in the No 11 raw sugar market fell by 163 lots to 821,014 open contracts as of September 2, the exchange said.
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