Raw sugar prices closed at their lowest this year after speculative sell-off, market sources said on Tuesday. New York Board of Trade's October raw sugar contract settled down 0.28 cent at 13.99 cents per lb after bottoming at 13.92 cents.
It was the benchmark contract's lowest close on a spot basis since 14.18 cents on January 3. March sank 0.32 to 14.50 cents, and the back-month contracts fell 0.22 to 0.30 cent. "We saw spec selling this morning on the lower call," said a trader, referring to the open at 14.02 cents. "The break through below 14 cents did attract some long liquidation."
Benchmark October's morning losses were limited by trade buying, and local short-covering triggered short-lived bouncebacks above 14 cents, the trader said.
"It was just a continuation of technical erosion, and concern that the pace of sugar harvesting in Brazil is growing quicker than the demand is able to able to absorb it," said Mike McDougall, senior vice president of FIMAT USA Inc Technicians pegged support at 13.85 and 13.65 cents for October delivery, with resistance at 14.06 and 14.40 cents.
The market was already on the defensive after a key resistance level held strong last week. NYBOT final estimated volume reached 58,168 lots from Monday's count of 35,976 contracts. Call volume hit 20.952 lots and puts touched 13,673 lots. Open interest rose 1,016 lots to 470,344 lots as of August 7.
The ethanol market was untraded. Meanwhile, US domestic sugar prices finished lower. September tumbled 0.10 cent to 21.15 cents per lb and November fell the same to 21.45 cents. The rest slipped 0.02 to 0.41 cent. Final estimated market volume was 953 lots, up from Monday's official tally of 334 lots.