LONDON, Oct 12: London white sugar futures eased on speculative selling in light volumes at midday, and traders said producer hedge selling against Thursday’s EU export tender could emerge later on Wednesday.
Front-month December was down $1.80 to $306.80 per ton in thin turnover of 287 lots at 1127 GMT, after moving from $309.00 to $306.30.
March was down $1.90 at $313.00 in volume of 95 lots, after trading from $314.20 to $312.90.
There is a little profit taking by small speculators, with trade and speculators on the buy side, one trader said.
Traders and analysts said speculators were now the main driving force in the London futures market, divorcing price levels from physical business, resulting in futures prices that seem overbought and vulnerable to a sharp correction lower.
Traders said producer hedge selling against Thursday’s EU sugar export tender could take place later in Wednesday’s session.
They said white sugar futures could face downward pressure as the EU seeks to export a hefty seven million tons of sugar in 2005/06, and the bloc was likely to adopt an aggressive policy and award large tonnages at its regular export tenders.
Last week, the EU sold a substantial 226,100 tons of white sugar at its export tender.
Physical sugar trade is slow because domestic harvests are under way in key importing countries, and speculators have driven up futures markets to inflated levels, traders and analysts said on Wednesday.
