ICE sugar slips again
Published: 09/01/2017, 5:13:59 PM
Raw sugar futures on ICE slipped on Friday as a short-covering rally that lifted prices to a four-week high in the previous session ran out of steam, according to Reuters.
October raw sugar was down 0.10 cents, or 0.7%, at 14.30 cents per lb by 1123 GMT, having hit a session low of 14.16 cents.
Prices rallied nearly 4% a day earlier, boosted by fund short-covering and a move by Brazil's Petrobras to raise gasoline prices, which is expected to make ethanol more competitive.
However, support waned on Thursday as short-covering petered out and producer hedging dampened gains, dealers said.
"That it has failed to make headway through recent highs comes as a bit of a disappointment for the bulls," said Nick Penney, senior trader at Sucden Financial. "Producers continue to sell to cover export requirements."
Focus also shifted back to the looming global surplus next season, with dealers closely monitoring spread movements ahead of the October expiry at the end of this month.
"The question now becomes, has the market deferred enough sugar into 2018?" Commonwealth Bank of Australia's Tobin Gorey said in a note, adding that the coming weeks will test whether the market is "prepared for the amount of sugar it will need to juggle later this year".
October white sugar fell US$3.20, or 0.8%, to US$383.70 a tonne. The focus was on the European Union, where production is expected to rise sharply in the season starting October.