New York sugar easier on heavy switch trade

Raw sugar futures finished softer Friday on speculative liquidation as investors unwound positions in spot March, although news of consumer buying should keep values supported into next week, brokers said. The New York Board of Trade's March raw sugar contract eased 0.02 cent to close at 9.13 cents a lb, ranging from 9.05 to 9.18 cents. May sugar lost 0.09 cent to 9.44 cents. Back months declined 0.01 to 0.04 cent.
"It was pretty uneventful. The whole thing was dominated by spreads and we'll probably see more position liquidation in March next week," said a dealer for a major trading house.
Sweetener values are being supported by news of consumer buying from Pakistan, which has booked orders for 250,000 tonnes of raw sugar this week and is expected to be in the market for several cargoes of white sugar.
The longer-term outlook for sugar is bullish due to a supply shortfall. Aside from Pakistan, neighbouring India is also expected to be a major importer of the sweetener and this would buttress market bulls looking for higher prices.
After crawling higher at the start on follow-through trade buying, the market lost steam and slowly eroded under the weight of investors transferring positions out of the spot March contract before it goes off the board on February 28. Open interest in March plunged 17,589 lots to 112,400 lots as of February 10.
Technicians see resistance in the March contract at 9.16 and 9.22 cents. Support was at 9.03 and 9.00 cents.
Volume traded just before the market closed for the day stood at 43,460 lots, versus the prior 81,478 lots. Call volume hit 9,637 lots and puts came to 5,615 contracts. Open interest in the No. 11 sugar market rose 793 lots to 401,884 contracts as of February 10.
Ethanol futures settled unchanged with the February contract ending at 95 cents a gallon.
US domestic sugar closed flat to lower Friday.
May fell 0.04 cent to 20.25 cents a lb while July slipped 0.02 to 20.62 cents. The rest were flat to 0.06 cent easier. Volume traded before the market shut hit 296 lots, from 194 lots previously.