November 17, 2016 (Sugaronline) | https://goo.gl/hGBVNG
Raw sugar futures fell sharply on Wednesday with funds scaling back long positions as the market digested a large delivery against the whites contract and production data from Centre-South Brazil which was higher than many had expected, according to Reuters.
March raw sugar was off 0.76 cent, or 3.5%, at 20.39 cents per lb at 1446 GMT after earlier dipping to a two-month low of 20.32 cents. Dealers said fund selling was driven partly by technical factors with a weak performance on Tuesday helping to create a more bearish outlook on price charts.
News that sugar production in the Centre-South of Brazil was slightly higher than some had expected in the second half of October also contributed to the bearish mood.
Industry group Unica said sugar production was 2.05 million tonnes, near the top of a range of forecasts of around 1.9 million to 2.08 million.
"We had slightly bearish Unica data with sugar production slightly higher than expected," Rabobank analyst Carlos Mera said, adding other bearish factors included the recent weakness of Brazil's real currency. "It seems like a good time for profit-taking," he added.
The expiry of the ICE December white sugar contract saw the largest delivery in more than nine years with 535,850 tonnes tendered, exchange data showed on Wednesday.
The bulk of the sugar, 404,250 tonnes, was tendered with a load port of Jebel Ali in the United Arab Emirates.
Some dealers said the large delivery was bearish, suggesting the deliverers could not find a better market for the sugar, while others saw it as more neutral, with the receivers likely to already have a plan for disposing of the sugar.
"You don't stick your hand up for the biggest delivery for quite some time if you don't have a plan. Presumably they (the receivers) have a destination," one trade source said. March white sugar was off US$14.10, or 2.5%, at US$540.60 per tonne