NYBOT raw sugar futures settled softer on Friday on producer and speculative sales in range-bound business, with the sweetener seen staying in its current band going into next week, brokers said.
March sugar fell 0.10 cent to conclude at 8.93 cents a lb, dealing between 8.92 and 9.05 cents. May ease 0.06 cent to 9.06 cents. The rest lost 0.02 or 0.04 cent. "It's all spec and producer selling.
The producers capped it and the specs dumped it on the way down," an investment house dealer said. Analysts said the key March contract appears confined in a band that ran from 8.85 to 9.10 cents.
"It's a range-bound market and I think we'll stay here until it breaks out either way," one said.
The market could see some pressure if funds begin to liquidate long positions in sugar. Open interest in the No. 11 sugar market at the New York Board of Trade fell 2,123 lots to 332,947 lots as of October 21.
Most market players feel sugar prices should work their way higher because of a supply deficit in 2004/05. "I think we need to pull back in the short-term to around 8.50 (cents in the March contract), but that would allow us to shoot up and possibly test the 10 cents area later on," a trader said.
Technicians believe resistance in the March contract would be in the region of 9.09 and 9.14 cents, then 9.40 cents. Support was at 8.90 and then down to 8.78 cents. Traders said estimated volume before the market closed for the day hit some 11,027 lots, from 23,763 lots previously.
Call volume at that time hit about 2,607 lots while puts stood at 1,973 lots. Ethanol futures settled flat with the November contract closing at 104 cents a gallon. US domestic sugar prices ended flat to higher on Friday.
January sugar gained 0.05 to 20.40 cents a lb and March added 0.02 to 20.45 cents. Except for two contracts, the rest settled flat. Traded volume just before the market concluded business hit over 956 lots, from 288 lots previously.
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