Raw sugar futures closed easier Friday on light investor sales prompted by a firm dollar before a holiday break, but most players feel another rally is likely given the sweetener's bullish outlook. The market will be closed Monday in observance of Martin Luther King Jr. Day. Trading resumes Tuesday. The March raw sugar contract slipped 0.14 cent to conclude at 27.62 cents per lb.
The contract moved from 27.32 to 27.83 cents. Volume traded in March reached 28,061 lots at 1:59 pm EST (1859 GMT). The market hit a 29-year top at 28.95 cents last week. "I think we'll see another attempt to take out (the March contract high of) 28.95 (cents) again," said Larry Young, an analyst at brokerage Infinity Futures in Chicago.
Beyond that level, the analysts feel a run toward the psychological 30-cents mark is likely. They believe strong demand out of Asia, particularly from India and Pakistan, will combine with tight supplies to propel the sweetener higher. Other sources of offtake include the United States, which is seen buying up to 1.0 million tonnes of sugar from April 1.
The Philippines said it is buying up to 150,000 tonnes around the same time as well. There has also been some market talk of dry conditions affecting the north-east cane crop of top grower Brazil. "There is demand and until we get to the second half of the year when supplies are good, this market is heading higher," an analyst said.
Technicians see support in the March contract at 27 and 26.90 cents, with resistance at 28.50 and 28.95 cents. Total volume Thursday reached 93,274 lots, compared with the previous session's 125,777 lots - ICE data. Open interest in the No 11 sugar market stood at 834,649 lots as of January 14, versus the previous 840,221 contracts - exchange data.
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