New York sugar firm on likely Pakistan buying

Raw sugar futures galloped to a strong finish on Friday on trade and speculative buying sparked by news Pakistan plans to buy 1.0 million tonnes of sugar from next week, brokers said. The New York Board of Trade's March raw sugar contract climbed 0.14 cent to end at 9.08 cents a lb, one tick below the session high of 9.09 cents.
The day's low was at 8.94 cents. May sugar added 0.13 cent to 9.47 cents.
The rest increased 0.06 to 0.10 cent.
Mike McDougall, senior vice-president of FIMAT USA Inc, said the news on Pakistan and talk that its South Asian neighbour India would also need to book orders of sugar provided a boost for futures.
He said there are some questions whether the momentum of today's advance can be sustained into next week.
"There's still a great deal of rolling to do. I think people will be focusing on the spread," said McDougall.
March is due to expire on February 28 and investors were transferring positions out of the contract. Open interest in March fell 9,696 lots to 183,222 lots as of February 3.
Players from top sugar producer and exporter Brazil will also be out on Monday and Tuesday due to the Carnival holiday.
Trade and then speculative buying enabled sugar to pop higher at the start, but producer sales began capping the market at 9.05 cents (basis March), the dealers said.
They said said that if March gets through the region from 9.05 to 9.13 cents, the market could surge higher on the back of automatic purchase orders sitting above that level.
Technicians said resistance in the March contract would be at 9.13 and last week's 9.32 cents high. Support was seen at 9.02 and then 9.80 cents.
Volume traded just before the market closed for the day stood at 33,473 lots, versus the prior 70,941 lots. Call volume hit 6,160 lots and puts came to 2,367 contracts. Open interest in the No. 11 sugar market fell 3,456 lots to 410,869 contracts as of February 3.
Ethanol futures settled flat with the February contract finishing at 95 cents a gallon.
US domestic sugar ended lower Friday. March tumbled 0.34 cent to 19.96 cents a lb and May shed 0.05 to 20.45 cents.
The rest lost 0.01 to 0.07 cent. Volume traded before the market shut hit 746 lots, from 651 lots previously.