Fund buying sent London white sugar futures to levels not seen since mid-October on Wednesday and dealers said further gains could be on the cards as the market looks to break above $260 a tonne, brokers said. Spot March closed $5.30 a tonne up at $259.70 a tonne on 5,423 lots after trading between $259.80 and $254.60.
"Fund buying brought us higher in London after a stronger US market on Monday and Tuesday. I think if the US market hadn't seen as much producer selling as it did, we'd be even higher than this," one trader said.
Dealers said the recent bout of fund liquidation that drove the market below $240 had left fund holders exposed and that several were no re-entering the fray to cover short positions.
Liffe May sugar closed $4.30 higher at $268.80 a tonne on 1,451 lots. A total 8,161 lots were traded.
In New York, raw sugar futures finished Wednesday at an 11-week high on another round of fund buying, with follow-through purchases and bullish fundamentals seen pushing the sweetener higher into 2005, brokers said.
The New York Board of Trade's March raw sugar contract increased 0.04 cent to settle at 9.06 cents a lb, near the top of its 8.96 to 9.07 cents band. It was the best close for the contract since ending at 9.25 cents on October 14.
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