London white sugar futures closed above a new 17-month low after a volatile session dominated by speculative and fund selling on Wednesday on continuing worries over a global supply glut. August settled up $1.10 to $301.50 a tonne after trading from $302.70 to $298.00, the lowest since November 2005.
Traders saw immediate support around $295.00. October finished up $1.10 at $295.60, having moved from $296.80 to $292.00. Dealers said trading had been choppy, with funds believed to be taking short positions, pushing the market down to the 17-month low, basis first month, of $298.00 in morning trade.
"Funds were net sellers for a while," one dealer said. Dealers said a delivery of a record 810,800 tonnes of mostly Thai white sugar received by merchant ED&F Man at the London May expiry was more likely to find buyers at lower prices.
Traders said producer selling had picked up despite the weak dollar. "The sugar's in the ground. They (producers) have to sell," a trader said. Some traders felt the weakness in prices was expected to trigger renewed buying interest. Traders saw no immediate market impact from news that Pakistan had no plans to import sugar in the present season ending in March 2008 as the country has enough stocks to meet its annual domestic demand of 3.9 million tonnes.
COFFEE SLIGHTLY DOWN: London robusta coffee futures ended slightly down on Wednesday but well above the day's lows with the market looking to consolidate after recent weakness, dealers said. Benchmark July ended $3 lower at $1,571 a tonne after trading in a range of $1,584 to $1,555.
Total volume was a fairly heavy 20,318 lots. Dealers said the market had weakened early amid nervousness that another wave of fund and speculative sales might emerge after prices fell more than three percent on Tuesday.
COCOA FIRMS: London cocoa futures closed marginally higher on Wednesday, hovering just above last week's five-week low as recent spec selling dried up but the upside remained hampered by a lack of bullish news, dealers said. "It has not been much of a day, we're stuck in a range and there's no fresh news out there," one said.
Benchmark July ended up 4 pounds at 995 pounds a tonne after trading in a range of 981 to 997 pounds. The contract slipped to a five-week low for the second position of 976 pounds on Friday. Total volume was a routine 13,454 lots.