New York sugar easier, trade mulls consumer buying

Raw sugar futures closed with small losses on Tuesday on speculative sales, but trade buying tied to talk of possible consumer purchases blunted the losses in the market, analysts said. The New York Board of Trade's May raw sugar contract eased 0.01 cent to finish at 8.75 cents a lb, in a band from 8.68 to 8.85 cents. It was the lowest level for sugar since trading in late February near 8.40 cents.
July fell 0.04 to 8.94 cents. The rest retreated 0.01 to 0.07 cent.
"There was a lot of trade buying on the way down and that rallied the market," a senior floor dealer said. "I think we should come off some more, but you've got a lot of cash interest at these low levels."
Most analysts feel strong consumer buying and a deficit in the global sugar supply/demand balance ought to keep prices buoyant. But others feel the bulk of the buying this season is done and a recovery in production may nudge values lower.
Sugar started flat to a touch higher but was beaten back by speculative accounts, who kept dumping the market, the dealers said. Trade buying and short-covering by small speculators enabled sugar to recover.
Analysts said the trade buying was tied to talk the Chinese were said to have bought 100,000 tonnes of sugar, either from top producer Brazil or Central America, for prompt delivery. Further talk of buying from North Africa buoyed sentiment.
Technicians said support in the May contract is at 8.68 and 8.50 cents. Resistance was pegged at 8.90 and 9.00 cents.
Estimated final volume stood at 59,679 lots, from the previous 62,220 lots. Call volume amounted to 7,182 lots and puts hit 6,300 lots.
Open interest in the No 11 sugar market fell 3,103 contracts to 355,873 lots as of March 21.
Ethanol futures closed unchanged again, with the April contract settling at 110 cents a gallon.
US domestic sugar futures ended flat to firmer.
May was steady at 20.50 cents a lb while July shed 0.01 to 20.59 cents. Back months were flat or up 0.01 cent. Final volume reached 217 lots, from a total of 289 lots previously.