Dealers said the session was unremarkable until a fund apparently came in selling before the close. "Late selling hit the ring. It ran some stops down near the lows," said a floor broker, referring to pre-positioned stop-loss sell orders in the low 11.20s and below.
May futures fell 0.10 to 11.18 cents and deferred delivery contracts lost 0.03-0.05 cent. On October 4, the Benchmark raw sugar contract reached a seven-year peak of 11.91 cents on expectations that leading growers like Brazil will divert cane into the production of ethanol given high crude prices.
But oil prices are well off record highs set two months ago. Plus, dealers said that the net fund long remains historically large, though reduced from its highs, so the risk of speculative liquidation hangs over the market.
"Demand is sluggish right now and even though energies rallied today, (energy futures have) been under pressure for a while, for people that were using the ethanol argument to try to boost the market," said Mike McDougall, senior vice president on the Brazil Desk at FIMAT USA Inc.
"If we break 11.16 we could test the upturned line that's been in place since may around 11.05," he said, adding, "we could see some technical deterioration, which should begin to attract demand."
In London white sugar trade, March sugar fell $1.80 to $281.10 a tonne.
December, which expires on November 15, fell $1.80 to $271.20 a tonne. Final estimated NYBOT raws volume was 32,400 lots, versus on Tuesday's official tally of 24,892.
Call volume was pegged at 3,792 lots and puts reached 8,710 lots. Open interest in the No 11 raw sugar market fell 426 lots to 464,156 lots as of Tuesday.
In US domestic sugar trade, the January contract fell 0.09 cent to 21.66 cents a lb. and March fell 0.04 cent to 21.34 cents. Florida's Agricultural Commissioner Charles Brandon said on Tuesday that damage to Florida's sugar cane farms from Hurricane Wilma will cost farmers more than $400 million, but the full extent of the destruction is still being assessed.