COMMODITIES : Sugar Futures Prices Sour as Supply Picture Improves

Sugar futures prices sank below 10 cents a pound for the first time in two months Wednesday on New York’s Coffee, Sugar & Cocoa Exchange amid signs of rising world supplies.

On other markets, crop futures were mixed; livestock and meat were mostly higher; precious metals gained; energy futures were narrowly mixed and stock index futures were unchanged.

Sugar for October delivery plunged 0.63 cent to 9.86 cents a pound, the lowest closing price for near-term delivery since June 16, when the July contract finished at 9.69 cents a pound.

The price for October sugar has fallen nearly 37% in the past month after reaching a seven-year high of 15.30 cents a pound on July 19.

French Estimate a Factor

Sugar futures had rallied on increased Asian buying after China moved to increase the availability of the sweetener to its citizens, analysts said. But Far Eastern buying stalled in mid-July, and futures prices have slipped steadily lower as the near-term supply picture improved.

Analysts said Wednesday’s selloff was rooted in a French agency’s estimate that the current European sugar beet crop would produce 13.51 million metric tons of sugar, compared to last year’s 12.8 million metric tons. The same agency had previously estimated a 200,000-metric-ton decline in European sugar production.

A metric ton is about 2,205 pounds.

Meanwhile, the U.S. Department of Agriculture reported Wednesday that mainland U.S. sugar production for the first half of 1988 totaled 2.4 million tons, a 2% increase from the same period a year ago. Hawaiian sugar production for the same period rose 6% to 419,000 tons, the USDA said.

Grain futures closed mostly lower while most soybean contracts advanced in a fourth day of see-saw trading on the Chicago Board of Trade.

Global Factors Watched

“There’s no rhyme or reason to it, necessarily,” said Victor Lespinasse, a trader with Dean Witter Reynolds Inc. “It’s just the same choppy pattern we’ve seen the last several days and I think we’re going to continue in this vein.”

With the end of the growing season approaching, grain and soybean traders are paying more attention to global demand factors and less attention to the weather’s impact on supplies, analysts said.

Export demand for corn, wheat and soybean products has been slack, possibly because of high prices linked to the summer-long drought, Lespinasse said.

Wheat settled 3.5 cents lower to 0.25 cent higher, with September at $3.9025 a bushel; corn was 2.25 cents lower to 3 cents higher, with September at $2.8475 a bushel; oats were 4.75 cents to 7 cents lower, with September at $2.705 a bushel, and soybeans were 6 cents lower to 15 cents higher, with August at $8.77 a bushel.

Livestock and meat futures settled mostly higher on the Chicago Mercantile Exchange in reaction to unexpectedly strong cash cattle and beef markets, said Charles Richardson, a livestock market analyst with Lind-Waldock & Co. in Denver.

Live cattle settled 0.50 cent to 1.30 cents higher, with August at 70.75 cents a pound; feeder cattle were 0.20 cent to 0.57 cent higher, with August at 82.25 cents a pound; hogs were 0.22 cent lower to 0.63 cent higher, with August at 46.95 cents a pound, and frozen pork bellies were 0.15 cent to 0.83 cent higher, with August at 34.70 cents a pound.

Gold and silver futures rose slightly in a late rally fueled by technical factors in a thin market, analysts said.

Gold settled $2.10 higher across the board, with October at $435.10 an ounce; silver was 3 cents to 3.7 cents higher, with September at $6.665 an ounce.

Crude oil futures fell slightly while oil products were mixed in very light trading on the New York Mercantile Exchange.

West Texas Intermediate crude oil, the U.S. benchmark, settled 2 cents to 8 cents lower, with September at $15.47 a barrel; heating oil was 0.10 cent to 0.30 cent lower, with September at 43.93 cents a gallon, and unleaded gasoline was 0.25 cent lower to 0.51 cent higher, with September at 46.62 cents a gallon.

Stock index futures were virtually unchanged on the Chicago Mercantile Exchange, where the contract for September delivery of the Standard & Poor’s 500 index settled at 261.25 points.

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