Raw sugar futures settled lower Monday on selling after the holiday break as players mulled the direction of the sweetener in the second quarter of 2010 after a volatile first quarter, brokers said. The market was closed Friday for a holiday. The May raw sugar contract declined 0.30 cent to conclude at 16.40 cents per lb. Trading range from 16.25 to 17.18 cents.
May volume at light 27,244 lots at 2:01 pm (1801 GMT). Last week, contract touched 11-month low at 15.46 cents. "I think we will test 15 cents (basis the spot month) before all is said and done," said Larry Young, analyst for brokerage Infinity Futures in Chicago. Since ascending to a 29-year peak at 30.40 cents on February 1, raw sugar has lost nearly half of its value.
Market subdued with London white sugar market still shut for Easter. The market there resumes trading on Tuesday. Fundamentally, the market is looking at a bumper cane crop in top grower Brazil. There are also expectations of increased sugar output in world No 1 consumer India, although that will depend on a normal monsoon. Analysts said physical buyers waiting to see if market will establish a bottom before stepping in.
Technically, many players still see further weakness in the market given long positions remaining in sugar. The betting is that this market still has room to "go lower," said Young. Support in May contract seen at 16.05/16.00 cents, with resistance at 17.50 cents. Volume traded Thursday hit 211,360 lots, versus the previous tally of 140,260 lots - ICE data. Open interest in No 11 sugar was at 698,686 lots as of April 1, from the prior tally of 705,064 lots - exchange data.