Raw sugar reeled from speculative and trade sales to finish on Thursday at its lowest level in 19 months and bearish fundamentals may drag prices even lower in the weeks ahead, brokers said. New York Board of Trade's May raw sugar contract settled down 0.27 cent or 2.6 percent at 9.85 cents per lb after trading from 9.83 to 9.99 cents.
For the first time since August 2005, the benchmark sugars contract closed below the psychologically vital 10-cent level. That was the time before the market embarked on a furious rally that hoisted sweetener values up a 25-year peak of 19.73 cents on February 3, 2006. July lost 0.24 to 9.96 cents and the rest retreated 0.16 to 0.21 cent. On the Intercontinenal Exchange NYBOT electronic platform for sugar, the May contract slid 0.27 cent to 9.85 cents by 1:27 pm EDT (1527 GMT).
"Once (May) fell below 10 (cents,) there was nothing to hold it up. You have Brazil's harvest coming up and there's news India's government will do something to help export sugar. That can only mean bad news for the market," a long-time floor analyst said.
Top producer Brazil is set to start harvesting a massive cane crop from its center-south region. On the other hand, India Farm Minister Shared Pawar said in New Delhi the government had approved a package of incentives for sugar mills, including a 2.0 million tonne buffer, to step up exports from the country's likely bumper cane crop.
India is set to churn out 25 million tonnes of sugar in the current season ending in September, up 30 percent from the previous year. Sugar was hit by successive waves of speculative and trade sales from the bell in open-outcry dealings and automatic sells orders kicked in once the May contract slid below 10 cents, dealers said.
"It looks like we're going to see 9.00 (cents) before long," one said. Technicians put support for the May contract in the open-outcry pit at 9.80 and 9.50 cents, with resistance at 10 and 10.50 cents. Open interest in the No 11 raw sugar market rose 59 lots to 654,810 contracts as of March 28.
Open-outcry volume traded around noon stood at 17,865 lots, from the prior open-outcry count of 15,868 lots. Call volume was 15,469 lots and puts at 14,825 lots. NYBOT said on Wednesday's electronic trade were 44,605 lots and total volume 60,473 lots.
The ethanol market was untraded. US domestic sugar prices ended mixed. The May contract edged up 0.01 to 21.06 cents per lb and July shed 0.03 to 20.89 cents as well. The rest ranged from 0.24 cent lower to 0.07 cent firmer. The electronic No 14 sugar market saw its May contract ease 0.01 cent to 21.04 cents at 1:28 pm.