ICE sugar slips on pending supply glut from Thailand
Published: 01/11/2018, 1:24:04 PM
Sugar futures on ICE fell to a three-week low on Thursday, under pressure from by weakening technicals and a looming global supply glut, partly fuelled by expectations for a record crop in Thailand, according to Reuters.
ICE March raw sugar was down 0.22 cent, or 1.5%, at 14.43 cents per lb by 1206 GMT, after hitting 14.38 cents, its weakest since Dec. 20.
Dealers said the technical structure had deteriorated and prices had fallen below key moving average levels, reinforcing the bearish chart signals.
They also said the bulk of the hotly-anticipated index fund buying had been done ahead of the official rebalancing period or post-settlement this week, making little impact on prices and souring speculative sentiment.
"The chatter about the index funds buying the market up has fallen away now," said one dealer. "So we're back to looking at it from other aspects. And technically, it's looking pretty dreadful."
Dealers said focus was also back on an expected global supply glut this season, with stronger-than-expected production in Thailand pressuring prices.
"As things progress, it looks as if (Thai production) is going to be better and better," the dealer said. "It's not good news obviously."
The country is expecting to produce a record output of sugarcane and refined sugar in 2017/18, boosted by favourable weather conditions, the government said.
Strong Thai production, coupled with a rebound in India's crop and a surge in EU output, has raised expectations for an even larger global surplus in 2017/18.
ICE March white sugar was down US$4.20, or 1.1%, at US$383.40 a tonne, after touching its weakest since Dec. 21.