Raw sugar prices buckled from late commodity fund sales to finish on Wednesday near session lows and the market may just consolidate near levels representing an 8-1/2 month low, brokers said.
The New York Board of Trade's October raw sugar contract fell 0.14 cent to close at 12.65 cents per lb, moving from 12.60 to 12.93 cents.
On Monday, the contract sank 6.4 percent to end at 12.50 cents in the lowest close for the market on a spot basis in 8-1/2 months since ending at 12.43 cents on November 30, 2005. March lost 0.12 to 13.32 cents. Back months retreated 0.15 to 0.22 cent. James Corridor of Liberty Trading Group said fund sales kept sugar contracts under pressure and there seems little, if any, commercial interest at this time to buoy values.
On a fundamental level, dealers and analysts said a surplus might put pressure on prices after sugar merchant Czanikow forecast a surplus of 3.1 million tonnes in 2006/07 and brokers Society J. Kinsman pegged the surplus at 3.3 million tonnes. The question, as has been the case recently, is how many cane top growers Brazil in producing the alternate fuel ethanol would use. Resistance was at 13 and 13.60 cents. Volume before the close stood at 46,047 lots, from the previous 45,570 lots.
Call volume reached 23,597 lots and puts amounted to 9,524 lots. Open interest in the No 11 raw sugar market fell 3,676 lots to 479,535 lots as of August 15.
No deals were done in the ethanol market. US domestic sugar prices ended mixed. November eased 0.03 to 20.95 cents per lb and January rose 0.05 to 20.96 cents.
The rest ranged from 0.07 cent lower to up 0.05 cent. Volume traded before the end stood at 305 lots, from the prior tally of 385 lots.