Raw sugar futures closed marginally softer on Thursday on modest speculative sales in fairly quiet dealings, with the sweetener seen range-bound over the next few days, brokers said.
March sugar on the New York Board of Trade slipped 0.01 cent to close at 9.03 cents a lb., ranging from 8.88 cents to 9.04 cents. May lose 0.03 cent to 9.12 cents. The rest declined 0.02 cent.
"The specs sold us, but starting from around 8.90 (cents in March), the trade came in and this prompted the locals to cover because they were so short," a long-time floor broker said.
Follow-through fund sales dropped sugar prices to there lows for the day, but the trade buying stabilised prices and enabled them to recover, traders said.
Longer-term, analysts feel sugar remains bullish because of a supply deficit in 2004/05 and expected stronger levels of consumer buying. For now, however, dealers feel sugar could probe lower, especially if the funds begin to liquidate long positions in sugar.
Open interest in NYBOT's No 11 sugar market fell 1,248 lots to 335,070 lots as of Wednesday. "It's hard to tell where it will be going. We could head south, although there seems to be pretty good support when we get near 8.80 cents (basis March)," a dealer said.
Technicians believe resistance in the March contract would be in the region of 9.09 cents and 9.14 cents, then 9.40 cents.
Support was at 8.90 cents and then downs to 8.78 cents. Traders said estimated volume for the day hit some 23,761 lots, up from 17,161 lots previously. Call volume hit about 4,643 lots, while puts stood at 2,580 lots.
Ethanol futures settled lower, with the November contract down 5.00 cents to 104 cents a gallon. US domestic sugar prices ended flat to firmer. January sugar went up 0.03 cent to 20.35 cents a lb. and March added 0.01 cent to 20.43 cents.
Except for two contracts, the rest finished unchanged. Traded volume just before the market concluded business hit over 300 lots, down from 1,038 lots previously.
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