A wave of speculative selling, against a backdrop of ample global supplies, sent both markets sharply lower in the previous session, with New York shedding 3.4 percent and London losing 3.1 percent. Dealers said the market was pressured further on Thursday by another wave of selling by speculators. "It's follow-through selling continuing on from yesterday," said one dealer. "With not much new on the horizon to change the trend, the selling has continued and the market is drifting lower." The weak technical close and the market's slip below the short-term moving average in the previous session was also adding further chart-based pressure, dealers said.
July raw sugar fell 0.14 cents, or 1.07 percent, to 12.92 cents per lb, after hitting a fresh 16-month low of 12.90 cents. The market was hit for a second day by broader commodity weakness which partly drove the sharp collapse in prices in the previous session. "The commodity basket remains under heavy selling pressure," said Sucden Financial's Tom Kujawa in a market update, noting the "speculative community continue to be in sell mode."
Dealers also pointed to a weakening Brazilian currency, which encourages producers to boost selling of dollar-traded commodities like sugar. Buying appetite, meanwhile, was lacklustre as focus remained on ample global supplies. "If you look at the spread between the July and October, it's still not enough of an incentive to front-load buying," said one dealer.