Raw sugar prices dipped on Tuesday, settling near a three-week low after a see-saw session as players struggled to find leads on the market's next move, brokers said.
The New York Board of Trade's October raw sugar contract slipped 0.03 cent to end at 15.67 cents per lb, trading from 15.59 to 15.88 cents. It was the lowest close for sugar on a spot basis since ending at 15.63 cents on June 29.
March lost 0.08 to 16.07 cents. One contract aside, the rest fell from 0.02 to 0.09 cent. "It's been choppy and it looks like it's going to stay that way," a long-time floor dealer said.
An early wave of trade buying spurred sugar prices up, but the trade accounts turned into sellers near 16 cents, basis October, and the market moved lower as a result, dealers said. The small speculators went along for the ride, buying the market when it headed north and then selling sugar when it came off late in the session, they said.
"The locals were trading the ranges so we ended pretty much being near unchanged," one explained. "The lack of cash interest (from possible sugar consumers) is also depressing this market."
Fundamentally, the outlook for 2006/07 is that supply and demand are in rough balance and most analysts feel prices will depend to a great degree on spikes in crude prices that could affect the demand for the alternate fuel ethanol.
Spikes in oil prices may tempt growers in Brazil to funnel more cane into manufacturing ethanol, shrinking supplies as a result, the analysts said. Technicians pegged support for the October contract at 15.50 cents, with resistance at 15.95 and 16.25 cents.
Volume before the end stood at 33,538 lots, against the previous 45,558 contracts. Call volume touched 10,579 lots and puts hit 5,651 lots. Open interest in the No 11 raw sugar market fell 258 lots to 461,449 lots as of July 17. The ethanol market was untraded. US domestic sugar prices ended mixed. September was flat at 22.55 cents per lb and November rose 0.11 to 22.55 cents as well. Three contracts aside, the rest were flat. Volume before the close of trade amounted to 389 lots, from the prior tally of 236 lots.