Raw sugar futures settled at a fresh two-week low on Monday after an early short-covering bounce faded at the 11-cent level and a decline in the price of crude oil triggered another downside push, brokers said. The key March raw sugar contract shed 0.10 cent to close at 10.85 cents per lb the lowest close on a spot basis for sugar since ending at 10.57 cents on December 5.
Trading from 10.80 to 11.15 cents. Volume traded in the March contract slowed to 16,716 lots at 1:58 pm EST (1858 GMT). May sugar fell 0.06 cent to 11.53 cents. Technical selling resistance at the 11.00-cent level and new lifetime lows in February crude oil contract combine to depress value brokers.
"We seem to have run into a little bit of resistance at around the 11-cent level. Most of the volume traded at that level. We have dropped off about 10 points from there, but on very light volume. "A broker said. India is likely to produce 20 million tonnes of sugar in the year to September 2009 against a previous forecast of 20.5-22 million tonnes Farm Minister Sharad Pawar.
Technicians see support in March at 10.75 and a double bottom near 10.50 cents, with resistance at 11 and 11.16 cents. Volume traded Friday in the No 11 sugar market at 88,213 lots exchange data. The domestic No 14 sugar market showed the March contract untraded at 2:02 pm volume on Friday in the No 14 market hit 58 lots, the exchange said.