Raw sugar prices tumbled on Monday on speculative selling, and the soft tone was compounded by the weakness of other commodity markets, brokers said. The New York Board of Trade's October raw sugar contract sank 0.41 cent, or 2.4 percent, to close at 16.46 cents per lb, near the bottom of its 16.43-16.78 band.
Last Thursday, the contract finished at 17.16 cents in the loftiest close for sugar on a spot basis since ending at 17.17 cents on May 15. March dove 0.36 to 16.86 cents. The rest retreated from 0.15 to 0.35 cent. "Sugar got overbought on this (recent) rally," said James Cordier of Liberty Trading Group.
Analysts said the close near the day's lows meant sugar prices may slip further in the days ahead. Fundamentally, most in the trade feel that supply and demand are in rough equilibrium although dealers said the recent spate of dry weather in leading producer and exporter Brazil bears watching.
Sugar contracts got hit from the opening bell by speculative sales and the market just sagged steadily throughout the session until some measure of trade buying came in at the lows, brokers said.
"We did not end well so we could easily a probe to lower ground tomorrow. The problem with sugar at this time, along with other commodity markets, is that we take a lot of our cue from what happens in the energy market," one explained.
On a technical level, analysts feel support in the October contract was at 16 cents, with resistance at 16.78 and 17 cents.
Volume before the close stood at 28,731 lots, against the previous 35,532 contracts. Call volume touched 8,466 lots and puts hit 7,157 lots. Open interest in the No 11 raw sugar market climbed 7,147 lots to 446,657 lots as of July 7.
No deals were done in the ethanol market.
US domestic sugar prices ended mostly lower. September fell 0.10 to 22.80 cents per lb and November shed 0.05 to 22.45 cents. The rest were flat to 0.08 cent lower. Volume before the end hit 28 lots, from the prior tally of 1,173 lots.