Raw sugar futures vaulted to a strong close on Thursday on trade and switch-related buying as talk of consumer purchases from the Middle East and Asia buoyed sentiment, brokers said. The New York Board of Trade's July raw sugar contract shot up 0.18 cent to close at the day's peak of 8.86 cents a lb., with the session low at 8.71 cents.
October rose 0.15 to 8.93 cents. The rest gained 0.07 to 0.12 cent. "There's trade and fund buying. There was supposed to be some physical business done and that probably gave us a bit of a boost," a trading house dealer said.
Analysts said that while Russia was a constant presence, there was talk of further buying from the Middle East and Asia. Further details were not available.
Most market participants feel steady buying by major importers like Russia and possibly China will keep prices well supported. Sugar popped higher from the bell, mainly because of trade buying and the feeling among some speculative funds that the recent downturn was overdone, traders said.
"The trade stepped in and we took off. When that happened, you had some funds coming in and the locals jumped in as well," one explained. The switches caused open interest in the July contract to fall 599 lots to 88,417 contracts as of June 15 while interest in October rose 8,571 to 166,324 contracts.
Technicians see support in the July contract at 8.60 and 8.50 cents, with resistance at 8.95/96 and then 9.00 cents. Estimated volume just before the close of trade stood at 45,796 lots, from the prior 63,274 lots.
Call volume reached 2,980 lots and puts came to 1,944 lots. Open interest in the No 11 raw sugar market climbed 9,188 lots to 361,791 contracts as of June 15.
Ethanol futures ended steady, with the June ethanol contract settling at 117 cents a gallon. US domestic sugar futures ended flat to higher. September rose 0.21 cent to 22.05 cents a lb. while November was flat at 21.15 cents. The rest were flat or up 0.01 cent. Volume traded just before the close of trade stood at 88 lots, against the prior count of 77 lots.
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