CSCE raw sugar prices extended their slide to a six-week low as a large crop from top-sugar grower Brazil weighed on market sentiment.
A report released on Tuesday by the International Sugar Organisation (ISO) also contributed to the bearish mood, by predicting limited upside for prices in the 2004/2005 crop cycle because the supply deficit will not be as high as many had speculated. CSCE active July sugar settled down 0.09 cent, or 1.4 percent, at 6.29 cents a lb. It traded from 6.52 to 6.27, its lowest price since March 29.
"There was probably underlying trade support, but the funds were really getting out of their positions," said analyst Ann Prendergast at Reface Inc. "I don't know that the ISO report produced the selling. I think the selling would have gone on. But it just confirmed there worst fears."
October fell 0.09 cent to 6.67 cents and back months went down 0.01 to 0.04.
Referring to expectations of a new record crop in Brazil's Centre-South and a considerable drop in India's production, the ISO said the fundamental situation in the 2003/04 crop cycle does not support any structural price upside during the season ending in September 2004.
Brazil is entering sugar harvest season. The USDA attache in Sao Paolo last month predicted 2004/05-cane production of 373 million tonnes, with raw sugar production of 27.55 million tonnes.
That would be up 7 percent from the 2003/04 crop. Estimated volume was 42,348 contracts, off from Monday's official 43,689-lot pace. Some traders were out of the market for travel to New York for Wednesday's Sugar Club dinner.
Support in CSCE July sugar was pinpointed at 6.15 and 6.04, with resistance pegged at 6.54, 6.65 and 7.25 cents. In London whites trade, Life's August contract ended down $1.60 at $214.00 a tonne.
Night's new sugar-based June ethanol contract rose 3.0 cents to 80.00 cents per gallon. Ethanol trades side-by-side in the same pit with Night's benchmark sugar No 11 contract.
US domestic sugar prices ended mixed. July sugar shed 0.03 cent to settle at 20.80 cents a lb., while September rose 0.04 to 20.90 cents.
The CSCE is a subsidiary of the New York Board of Trade.