This was a pretty hard fall!
Sugar intraday
Sugar daily
from Bloomberg:
Sugar futures plunged 10 percent as computerized trading triggered sales following an early slide spurred by bets that demand may ease on the heels of the rally in the second half of 2010.
“You had an initial movement that triggered a lot of stop losses,” or orders to sell when the price drops to a specified level, said Ricardo Scaff, a trader at Rabobank International in New York. “Some trading systems are automatic, and once they see the movement, they add to it.”
Raw-sugar futures for March delivery slumped 3.45 cents to settle at 30.38 cents a pound at 2 p.m. on ICE Futures U.S. in New York. The percentage drop was the biggest since Nov. 12. On that date, the commodity plunged 12 percent, the most since July 1988, as speculation that China would increase borrowing costs roiled commodity markets.
“A sell-off was expected at the end of the year,” said Mario Silveira, an analyst at FCStone Group Inc. in Campinas, Brazil. “No one thought it would be of this magnitude.”
Companies are switching to substitute sweeteners because of high sugar prices, Michael McDougall, a senior vice president at Newedge USA, said this week in a report. Yesterday, futures dropped 1.6 percent.
Yesterday, the price reached 34.77 cents, the highest since November 1980, as floods damaged crops in Australia, the world’s third-biggest exporter.
Brazil, Thailand
Anna Bligh, the premier of Australia’s Queensland state, said today that floods resulted in “a disaster that is going to run into the billions of dollars.” Adverse weather also has hurt crops in Brazil, the top exporter, and Thailand, the second-biggest.
In the second half of this year, sugar has jumped 89 percent, the biggest gain among 19 raw materials in the Thomson Reuters/Jefferies CRB Index. In 2010, the sweetener is up 13 percent. The price plunged 40 percent in the first half.
Refined-sugar futures for March delivery fell $65.10, or 7.9 percent, to $761.30 a metric ton on NYSE Liffe in London, the biggest drop since Nov. 12. The price jumped 62 percent in the second half of the year.
“There is a pullback in the market,” said Tom Mikulski, a senior strategist at Lind-Waldock, a broker in Chicago. “Also, there is bound be some profit-taking at this time of the year.”
