By Carolyn Cui
Prices of sugar futures resumed their downward slide on Friday, as traders continued to exit the market amid signs of surplus.
Raw sugar for March delivery dropped 1.8% to settle at 18.22 cents a pound on the ICE Futures U.S. exchange, reversing most of the gains recorded a day earlier. Sugar bounced back on Thursday following a five-day losing streak, but Friday's retreat signaled that the market has yet to see the bottom. Sugar has entered a bear market after plunging more than 20% in price from its recent high reached Oct. 5.
"We suspect that wasn't the bottom and we will test lower in the New Year," wrote Tom Kujawa, co-head of softs department at Sucden Financial Ltd. in a note to clients.
Despite the nearby tightness in the sugar market, global output for the next season is still expected to exceed demand. Brazil is still exporting in large quantities, and the buy side of the market seems smaller, as China has greatly cut back on imports and dumped sugar from its state reserves.
This bearish outlook has encouraged selling from speculators who had built up a hugely long position in the sugar market over the past year or so.
The U.S. Commodity Futures Trading Commission is scheduled to release the latest weekly commitment of traders' report later Friday.
In other markets, cocoa for March fell 0.2% to $2,238 a ton, arabica coffee for March was up 0.2% to close at $1.4245 a pound, frozen concentrated orange juice futures for January lost 0.2% to settle at $1.9505 a pound, and March cotton was down 0.9% to settle at 71.04 cents a pound.
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(END) Dow Jones Newswires
December 16, 2016 15:48 ET (20:48 GMT)
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