Fundamentally, the market is seen staying close to its highest level in over seven years due to the diversion of large amounts of cane in growers like Brazil to produce the bio-fuel ethanol, they said.
The New York Board of Trade's key March raw sugar contract slumped 0.17 cent, or 1.4 percent, to close at 11.63 cents a lb., dealing from 11.60 to 11.86 cents.
May shed 0.16 to 11.56 cents. The rest fell 0.06 to 0.14 cent. "We're getting into a tight band here," said James Corridor of Liberty Trading Group, adding though that the outlook for sugar is that it would remain well supported over 11 cents.
Sugar started flat and banked on follow-through buying to hit its highest mark for the day, dealers said.
"The producers and the trade put a lid on it and when the locals saw late in the day that it could not regain the highs, they got out," one said, adding sugar has been swinging in a band from 11.50 to 11.85 cents.
Consumer interest in sugar remained slack, with most buyers sidelined given the lofty prices in the market, brokers said. Volume traded before the close amounted to 23,637 lots, versus the previous tally of 39,160 contracts.
Call volume hit 3,395 contracts and puts stood at 5,114 lots. Technicians said they feel resistance for the March contract would be at the contract peak of 11.91 and then 12 cents.
Support would be at 11.50 and 11.40 cents. Open interest in the No 11 raw sugar market dove 12,285 lots to 466,772 lots as of October 21.
Ethanol futures were unquoted.
No quotes were seen in the spot November ethanol contract. US domestic sugar prices ended mostly easier. Traders said they would be waiting for news on damage by Hurricane Wilma to sugarcane fields in Florida, the leading sugar producer in the United States.
The January contract fell 0.03 to 21.85 cents a lb. and March shed 0.02 to 21.68 cents. Two contracts aside, the rest fell 0.01 to 0.07 cent. Volume traded before the end of business hit 335 lots, from the previous tally of 746 lots.