A lag in demand on the physical sugar market and building world stocks weighed on sugar prices, sending futures to multi-month lows on Tuesday. Benchmark ICE raw sugar futures for October delivery closed down 0.21 cent, or 1.3 percent, at 15.47 cents, after falling to their lowest since Feb. 12 at 15.44 cents, reports Reuters.
Sugar for August delivery dropped by Rs 9, or 0.30 percent, to Rs 2,997 per quintal with an open interest of 20,620 lots, according to The Business Standard.
A European trader told Reuters, "Physical values in Brazil crept lower this week even in the face of the futures decline. The problem we have is that the sugar is coming in Brazil at a very quick pace, at a time when the world market just doesn't need it."
The Business Standard reports that analysts believe removal of positions by speculators, which were due to this oversupply in the physical market and a decrease in demand from bulk consumers, have kept consistent pressure on sugar prices at futures trade.
October white sugar on Liffe settled lower by $5.30, or 1.2 percent, at $420.10 per ton, after dropping to $419.50, the lowest since Jan. 31, according to Reuters.
Risk Disclosure
This material is conveyed as a solicitation for entering into a derivatives transaction.
This material has been prepared by a Daniels Trading broker who provides research market commentary and trade recommendations as part of his or her solicitation for accounts and solicitation for trades; however, Daniels Trading does not maintain a research department as defined in CFTC Rule 1.71. Daniels Trading, its principals, brokers and employees may trade in derivatives for their own accounts or for the accounts of others. Due to various factors (such as risk tolerance, margin requirements, trading objectives, short term vs. long term strategies, technical vs. fundamental market analysis, and other factors) such trading may result in the initiation or liquidation of positions that are different from or contrary to the opinions and recommendations contained therein.
Past performance is not necessarily indicative of future performance. The risk of loss in trading futures contracts or commodity options can be substantial, and therefore investors should understand the risks involved in taking leveraged positions and must assume responsibility for the risks associated with such investments and for their results.
Trade recommendations and profit/loss calculations may not include commissions and fees. Please consult your broker for details based on your trading arrangement and commission setup.
You should carefully consider whether such trading is suitable for you in light of your circumstances and financial resources. You should read the "risk disclosure" webpage accessed at www.DanielsTrading.com at the bottom of the homepage. Daniels Trading is not affiliated with nor does it endorse any third-party trading system, newsletter or other similar service. Daniels Trading does not guarantee or verify any performance claims made by such systems or service.
