Raw sugar futures settled up and near session highs on Wednesday on late buying by small speculators, and brokers said they hope follow-through purchases could nudge the sweetener up tomorrow. The New York Board of Trade's key March raw sugar contract rose 0.06 cent to finish at 8.90 cents a lb, moving from 8.78 and 8.92 cents. May add 0.04 to 9.05 cents. The rest rose 0.02 to 0.09 cent.
"The locals gave it a boost late by going home long. You kind of hope the good close will result in further buying tomorrow. But you know it's not a sure thing because the locals can easily turn around and bail if the producers show up," a long-time floor dealer said.
Fundamentally, the outlook for sugar looks bullish due to expectations of a supply deficit in 2004/05 and possibly stronger levels of consumer buying in the years ahead from places like China.
Speculative sales knocked sugar down to its lows at the start of business, but trade buying emerged and the speculators piled in late in the day to drive the sweetener to near its highs for the session, the floor dealers said.
Analysts said news that Iran had purchased 40,000 tonnes of raw sugar for January shipment may have also provided stability for the market and enabled it to march higher. Technicians put support in the March contract at 8.80 and 8.75 cents, with resistance at 9.00 and 9.04 cents.
Traded volume just before the market closed for the day reached 17,663 lots, down from Tuesday's tally of 26,349 lots. Call volume stood at 6,669 lots while puts hit 2,686 lots. Open interest in the No 11 sugar market rose 1,659 contracts to 320,157 lots as of November 30.
Ethanol futures closed unchanged with February at 95 cents a gallon.
US domestic sugar prices ended mostly lower. January eased 0.01 cent to 20.35 cents a lb and March lost the same to 20.36 cents. Three contracts aside, the rest fell 0.01 or 0.02-cent. Traded volume before the market closed touched 197 lots, up from yesterday's count of 127 lots.
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