Raw sugar futures closed lower on Friday on profit-taking and in line with softer outside markets, but analysts said the sweetener is poised to move up on chart-based buying next week. The key May sugar contract slid 0.51 cent to finish at 12.55 cents per lb. Trading from 12.48 to 13.14 cents.
Volume traded in the May contract reached 52,519 lots at 2:23 pm EDT (1823 GMT). July sugar fell 0.46 cent at 13.17 cents. "Sugar seems to be following the crude and stocks again today. Both have been weak and so has sugar," Jack Scoville, an analyst for brokers the Price Group in Chicago, said.
"It is Friday and therefore profit taking day, but the tone has been pretty good this week, so I hope for higher values next week,' Scoville said, adding there is a "chance to run to 14.10 (cents, basis) May if it wants." A negative factor for sugar is the fact there has not been "much demand news around lately, and I think we might need some," he said.
Sterling Smith, an analyst for brokers FuturesOne, described the pressure exerted on the sweetener by investor sales as a "minor outbreak of fleas." Analysts said sugar contracts are garnering momentum to challenge the area of 13.30/35, 13.50 and up to 14 cents. Fundamentally, the trade is looking for sizable off-take in the months ahead from India and China.
Technicians believe resistance in the May contract is at 13.25/35, then 13.50 cents. They said support in May should be at 12.50 cents. Volume traded Thursday in the No 11 sugar market was at 159,186 lots, from the prior 126,284 lots - the exchange said.
Open interest for No 11 sugar market was at 705,704 lots as of April 2, from the previous 696,027 contracts - exchange data. The No 14 sugar contract showed the July contract up 0.15 cent at 21.90 cents per lb at 2:26 pm volume on Thursday in the No 14 market was at 860 lots, against the previous 310 lots -exchange data.
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