Raw sugar futures settled easier on Tuesday on speculative sales after an early boost provided by investment fund buying petered out, with brokers saying the weak tone may lead to more losses this week. ICE Futures March electronic sugar contract was down 0.03 cent to 9.93 cents at 1:14 pm EST (1814 GMT), moving between 9.85 and 10.02 cents.
The March open-outcry sugar contract slipped 0.06 cent to close at 9.90 cents per lb, dealing from 9.85 to 10 cents. One contract aside, the rest added 0.01 to 0.03 cent. "We had fund broker pushing it up, but we could not get over 10 (cents, basis March) and the specs just knocked it down. I think we will eventually go down because we keep failing topside," a long-time floor trader said.
Analysts said there are some automatic sell orders which could kick in if the March contract goes to 9.90 and more at the double-bottom of support at 9.83 cents. Fundamentally, the market has been partly inspired by strong crude prices, which may tempt producers to use more cane to manufacture the alternate fuel ethanol. But producer selling and the weight of excessive supplies often capped most advances, forcing speculators to dump sugar at its highs, the analysts said.
On a technical level, dealers said support in the March raw sugar contract would be at 9.83 and 9.50 cents, with resistance at 10.22, 10.25 and then 10.50 cents. Open-outcry volume around noon was at 14,612 lots, versus the prior tally of 5,984 lots. Call volume reached 4,475 lots while puts hit 3,130 lots. Screen trade on Monday was 51,788 lots and total volume reached 57,772 lots.
Open interest in the No 11 sugar market fell 6,817 lots to 767,526 lots as of November 12. No deals were done in the ethanol market. The US electronic domestic No 14 sugar market showed the January contract flat at 20.02 cents at 1:16 pm Screen volume traded Monday reached 146 lots while no lots were traded in the pit, the exchange said.