Raw sugar futures closed near their lows on Thursday due to sales by producers and small speculators, with the market seen staying in a trading band on Friday, brokers said. The New York Board of Trade's key March raw sugar contract fell 0.08 cent to settle at 8.82 cents a lb, dealing from 8.81 to 8.96 cents. May sugar shed 0.06 to 8.99 cents. The rest lost 0.03 to 0.05 cent.
"The whole thing was just not overwhelming. There was a good producer sale at 8.95 (cents, basis March) and the locals unloaded as well. I don't see much on the horizon because there's good support at 8.75 and strong origin sales at 9.00 (cents in March)," a senior floor dealer said.
The outlook for the sweetener is seen as bullish due to a supply deficit in 2004/05 and steady levels of consumer buying in the coming years by nations like China.
Sugar popped higher on speculative fund buying but an increased level of sales from exporters like Thailand and Brazil capped the market and prompted speculators who took on long positions to abandon those positions, floor dealers said.
"The funds are already long so any upside is limited. The producers are also eager to sell every time we get near 9.00 cents," an analyst explained. Technicians said they feel support in the March contract is at 8.80 and 8.75 cents, while resistance would be at 9.00 and 9.04 cents.
Traded volume just before the market closed for the day reached 19,530 lots, from the previous tally of 25,394 lots. Call volume at that time stood at 4,090 lots while puts hit 2,206 lots.
Open interest in the No 11 sugar market shot up 5,421 contracts to 325,578 lots as of December 1. Ethanol futures closed steady with the February contract finishing at 95 cents a gallon.
January sugar lost 0.10 cent to 20.25 cents a lb and March fell 0.01 to 20.35 cents. Two contracts aside, the rest were unchanged. Traded volume before the market closed touched 904 lots, versus the prior 255 lots.
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