Raw sugar prices closed lower on Monday as trading was dominated by investors liquidating positions in the spot contract before it goes off the board at the end of next week, analysts said.
The New York Board of Trade's July raw sugar contract fell 0.16 cent to end at the day's low of 14.85 cents per lb, with the session high at 15.02 cents. The now benchmark October contract lost the same to 15.19 cents, moving from 15.18 to 15.33 cents.
Losses in the back months ranged from 0.19 to 0.30 cent. James Cornier of Liberty Trading Group said "switch for the next several sessions" would be the order of business as players complete unwinding positions in the July contract.
Open interest in July sank 8,273 lots to 67,466 lots as of June 16 while interest in October rose 9,141 to 225,369 lots. "Spreads are the main thing you will see in this market. Once July is done, we'll get a better sense of where we go to next," a floor broker said.
On a fundamental level, the market took note of news that sugar merchant ED&F Man said on Thursday that the global sugar deficit appears to be falling with record cane supplies seen coming in for 2006/07.
The investment, pension and hedge funds, which rocketed sugar to its highest level in 25 years, have largely sold down their holdings in the market as well. Technicians feel support in the now active October contract was at 15 and 14.85 cents, with resistance at 15.33 and 16 cents further afield. Volume before the close stood at 30,098 lots, against the previous 54,959 contracts.
Call volume touched 8,970 lots and puts hit 2,130 lots. Open interest in the No 11 raw sugar market rose 1,228 lots to 453,557 lots as of June 16. No deals were done in the ethanol market. US domestic sugar prices finished mixed.
September rose 0.14 to 23.30 cents per lb and November shed 0.03 to 22.42 cents. Except for one contract, the rest were flat. Volume before the close hit 261 lots, from the previous 197 lots.