New York sugar finishes firmer

Raw sugar prices settled higher on Wednesday on trade buying and speculative short-covering to reverse a run of sizeable losses, but the longer-term trend for prices points to lower levels, brokers said.
New York Board of Trade's March raw sugar contract rose 0.27 cent or nearly 2.5 percent to end at 11.16 cents per lb, dealing from 10.66 to 11.20 cents. May sugar add 0.23 to 11.35 cents and the rest gained 0.21 or 0.22 cent. "There was some cash interest and destination buying to stabilise it and that forced the locals (small speculators) to cover late.
But I think we're still headed lower especially with funds getting out and the fundamentals the way they are," a floor analyst said. Sugar is struggling with a glut in 2006/07 and the near-term prospect has been clouded by a record delivery upon expiration of the October raw sugar contract when over 1.1 million tonnes were delivered against the tape here.
"The funds are not exactly in love with sugar and you have a glut and all those supplies that need to find homes," a dealer said. Follow-through speculative fund sales dragged the market to lower ground at the start, but the move petered out when trade and consumer buying stepped up with the small speculators joining the fray late, the dealers said.
Analysts said that with the then spot October contract falling below 10 cents last month, the chart signals are in place for investors to make a run at areas below that level.
"We'll probably take a shot at 10 and see what's there or below it," one explained. Technicians put support for the benchmark March contract at 11 and 10.50 cents, with resistance at 11.20 cents. Volume before the close stood at 46,205 lots, down from Tuesday's tally of 76,556 lots. Call volume reached 5,087 lots and puts amounted to 7,896 lots. Open interest in the No 11 raw sugar market fell 268 contracts to 432,984 lots as of October 3. Ethanol futures were untraded. US domestic sugar prices ended mixed. November slid 0.39 cent to 20.36 cents per lb and January fell 0.36 to 20.40 cents. The rest ranged from 0.15 cent higher to 0.16 cent lower. Volume before the end hit 703 lots, up from the prior count of 613 lots.