ICE sugar tumbles as spec buying wanes
Published: 01/04/2018, 2:06:37 PM
Raw sugar futures tumbled on Thursday, retreating from a five-week high as chart signals weakened and speculative buying waned, according to Reuters.
ICE March raw sugar was down 0.33 cent or 2.2% at 14.98 cents a lb by 1121 GMT, after touching a session low of 14.85 cents.
On Wednesday, prices rose to 15.37 cents, their highest since Nov. 28. The market has recently rallied on expectations that index funds will buy about 60,000 lots to rebalance their investments after sugar's poor performance in 2017.
However, prices retreated before Wednesday's close, which undermined the technical structure and discouraged further speculative buying, dealers said.
Dealers also noted the market had moved into overbought territory and its failure to once again break above highs had sapped momentum.
"Futures have failed to break the upper trend channel in recent months," said Geordie Wilkes, technical analyst at Sucden Financial, noting failure to hold above the 40-day moving average could pave the way for lower prices.
Dealers also said index funds may have already bought a large chunk of the volume they are targeting, leaving little room for further gains.
Fundamentally, focus also remained on ample global supplies, after analyst Green Pool on Wednesday boosted its surplus expectations for the 2017/18 season.
March white sugar was down US$8.40, or 2.1%, at US$390.90 a tonne.