ICE sugar slides due to bearish near-term signals
Published: 08/03/2017, 5:24:38 PM
Sugar futures tumbled amid broader sluggishness in commodity markets, according to Dow Jones.
Prices for the sweetener rose to a two-month high earlier this week, spurred by an ethanol tax cut in Brazil. But sugar futures have since tracked lower on supply pressure. Futures fell sharply on Thursday as they slid through technical support indicators.
"The supply is very high. That's bearish for the short term, and it's mainly coming from Brazil," said Peter Mooses, a senior market strategist at RJO Futures in Chicago, referring to an ongoing harvest in the South American country. Brazil is the world's largest producer of sugar.
Raw sugar for October delivery was down 2.3% to 14.45 cents a pound on Thursday morning at the ICE Futures U.S. Exchange, falling as low as 13.92 cents a pound.
Analysts said technical factors were largely behind Thursday's moves. Otherwise positive indicators were starting to soften on the back of cooler buying interest, Sucden Financial Research said in a note to clients.
A prolonged slide in the dollar has supported sugar and other commodities, though the greenback was mixed on Thursday, rising in the early morning before turning lower. That pause encouraged some funds to sell their positions, said David Martin, founder of hedge fund Martin Fund Management in New York. Crude oil futures were also mixed.