ICE raw sugar futures ended up on Tuesday as investors took advantage of Monday's sharp sell-off to buy in at lower levels, but a burdensome backdrop of increasing supply threatened further price gains, analysts said.
"After the market comes down the equivalent of what used to be three limit moves, it's entitled to have some sort of bounce and bottom-picking," said Judy Ganes-Chase of J Ganes Consulting. "But do I think it should hold? No I still think 12.00 cents is too much for a market that's in oversupply." The ICE Futures May electronic sugar contract ended settled up 0.19 cent at 12.28 cents a lb, after dealing between 12.04 and 12.44 cents.
By 1:43 pm EDT (1743 GMT), May sugar was up 0.33 cent at 12.42 cents. Daily settlement times remain the same as they were during former open-outcry business, though contracts continue to trade electronically until 1515 EST (2015 GMT).
Sugar prices are down nearly 23 percent since hitting a 19-month peak above 15.00 cents in March as investors cashed in on the impressive rally that saw the market climb over 35 percent since the start of the year.