London sugar futures jumped on Tuesday with prices boosted by trade and fund buying together with gains in New York, dealers said.
Front-month March closed $5.00 up at $186.40 a tonne, having moved between $186.50 and $181.00 on 2,876 lots from total turnover of 4,893 lots.
It broke through initial resistance at $185.00 but traders said the upside should be limited in the absence of fundamental news.
May gained $4.40 to close at $186.40 on 1,315 lots.
The March-May spread was quoted around a $1.00 discount to flat, from a 50 to 80 cent premium on Monday.
Traders said the market's move up remained technical and it was not clear if it could be sustainable.
"The initial gains we saw in London were led by the rise in New York and then we saw some fund buying and some trade buying on the whites market. Overall though interest has been fairly light," one dealer said.
Technical analysts said the market had scope for short-term gains, with resistance on LIFFE March seen at $187.00 after breaching $185.00 earlier. Support was put at $177.10. Analysts said the prices were likely to be under pressure due to surplus global stocks.
"Fundamentals remain bearish. Although the stocks to consumption ratio is expected to fall by the end of 2003/04, it is still far too high to have a favourable impact on prices," German analyst F.O. Licht said in its latest weekly report.
Comments
Comments are closed.