Raw sugar futures slumped to close down 4.5 percent at an eight-month low Monday due to fund and chart-based selling, and automatic sell orders, brokers said. The May raw sugar contract tumbled 0.80 cent or 4.5 percent to finish at 17.84 cents per lb, the weakest settlement for the spot contract since July 2009. May moved widely from 17.59 to 18.85 cents.
Volume traded in May reached 52,914 lots. The day's move took the market down 42.1 percent from the 29-year top of 30.40 cents on February 1. Technical selling pushed the market sharply lower - traders. Heavy fund selling caused the sharply lower move but the spot raw sugar contract should hold support at 17.50 cents per lb, a trend line dating back to October 2008 - Jimmy Tintle, analyst with Transworld Futures in Tampa, Florida.
The spot contract will likely move sideways in the near future, unless it breaks above 20 cents, which would make 25 cents the next target - Tintle. The market ignored the US dollar, which reversed lower and gave support to other soft commodities. Total volume Friday reached 108,160 lots, versus the previous 157,529 lots - ICE data. Open interest in the No 11 sugar market was at 744,025 lots as of March 19, from the prior 750,205 contracts - ICE.