Raw sugar futures ended lower Wednesday as profit-taking hit the sweetener and analysts feel a deeper correction from investors taking cash off the table from the recent rally is likely in the days ahead. The July raw sugar contracts declined 0.32 cent to finish at 15.40 cents per lb.
The contract traded from 15.32 to 15.76 cents. Volume traded in the July contract reached 53,767 lots at 2:11 pm EDT (1811 GMT). October sugar fell 0.22 cent to end at 16.15 cents. "Sixteen (cents) is historically a pivotal number...quite a barrier" for the market, said James Cordier, an analyst for brokers optionsellers.com in Florida.
He said the current correction could see sugar prices fall back to 15 cents in the coming sessions. Another analyst said a retreat to 14.75 and then 14.25 cents, basis July, could happen. But several analysts feel any correction could be short-lived. They said a fall could spur importers in India, the world's No 1 consumer of sugar, to step back into the market. India still needs to book at least 400,000 tonnes of sugar and most in the trade believe its imports for 2009-10 would reach 2.5 million tonnes of sugar.
Other sources of offtake are Pakistan, which is seen importing 730,000 tonnes of sugar, and maybe China. Technicians believe resistance in the July contract is at 16 cents. Support in July should be at 15 and 14.50 cents. Volume traded Tuesday in the No 11 sugar market was 166,023 lots, from the prior 109,318 lots - the exchange said.
Open interest in the No 11 sugar market was at 687,013 lots as of May 12, from the prior 686,243 contracts - exchange data. The No 14 sugar contract showed the July contract flat at 21.40 cents at 2:12 pm volume on Tuesday in the No 14 domestic sugar market was at 446 lots, against the previous 55 lots - exchange data.
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