Raw sugar prices finished mixed on Thursday as the market consolidated further after tumbling to a two-year earlier this week, analysts said. New York Board of Trade's key July raw sugar contract settled flat at 8.68 cents per lb. after trading 8.66 to 8.78 cents. October shed 0.02 to 9.01 cents.
One contract aside, the rest eased 0.01 cent. On the IntercontinentalExchange's NYBOT electronic market for sugar, the July contract added 0.01 cent to 8.69 cents at 1:19 pm.
"We've got trade buying underneath and producer sales above. I believe we could still bounce a little bit but it's not going too far from here given the surplus we have," a long-time dealer for a brokerage house said. A burdensome glut will weigh on sugar values but growers and millers showed little sign of selling the sweetener since current prices were unprofitable for them, brokers said.
Industry groups and trade houses said a glut in sugar which could persist into 2008/09 will probably keep futures under pressure in the coming months. The International Sugar Organisation upped its estimate of a global sugar surplus to 9.1 million tonnes in 2006/07 from an earlier forecast of over 7.2 million made in February.
Futures started steady and speculators proceeded to establish a trading band from which the market did not stray, dealers said. "The trends are for an eventual test of 8.50 (cents, basis July), but it could hang around here while making up its mind on what it wants to do next," one said.
Technicians peg support for the July contract at 8.50 and 8.00 cents, with resistance at 9.00 and 9.50 cents. Open-outcry volume in sugar around noon was at 7,477 lots, versus the previous tally of 10,650 lots.
Call volume was 4,983 lots and puts 2,263 lots. NYBOT said on Wednesday's screen trade were 55,896 lots and total volume 66,546 lots. Open interest in the No 11 raw sugar market fell 1,963 lots to 735,987 lots as of May 16. The ethanol market was unthreaded.
US domestic sugar prices ended mostly flat. July was steady at 21.49 cents per lb. with September likewise flat at 21.01 cents. One contract aside, the rest were unchanged too. Screen volume traded on Wednesday in the No 14 sugar market hit 46 lots and open-outcry deals amounted to 841 lots. On the electronic No 14 sugar market, the September contract rose 0.04 cent to 21.05 cents at 1:20 pm.