Raw sugar prices closed Friday near session highs due to late speculative short-covering, although the sweetener is still mired in a band and would need fresh leads next week, brokers said.
The sweetener has recently surged to its highest level in over seven years due to aggressive fund buying sparked by speculation steep crude oil prices would tempt sugar growers in Brazil and elsewhere to produce the bio-fuel ethanol, they said.
The New York Board of Trade's key March raw sugar contract gained 0.17 cent, or 1.46 percent, to settle at 11.80 cents a lb, dealing from 11.65 to 11.81 cents. May added the same to 11.72 cents. The rest rose 0.10 or 0.13 cent.
"Despite some attempts to pull back this week, the market is holding surprisingly well. But we're still in a range between say, 11.40/50 (cents) and the contract high (of 11.91)" cents in March, a veteran floor dealer said. "We really need some news to break out of this band."
Sugar popped higher at the start and was trading a few points above unchanged when speculators bought it late, dealers said. "We had a late short-covering rally by the specs in light volume and that was it," one said.
Volume traded before the close amounted to 37,759 lots, versus the previous tally of 34,398 contracts. Call volume hit 13,279 contracts and puts stood at 6,687 lots.
Technicians said they feel resistance for the March contract would be at the contract peak of 11.91 and then 12 cents. Support would be at 11.50 and 11.40 cents.
Open interest in the No 11 raw sugar market rose 478 lots to 479,057 lots as of October 20. Ethanol futures were not traded. No quotes were seen in the spot November ethanol contract.
US domestic sugar prices ended lower. Traders said buying earlier in the week caused by concern Hurricane Wilma will hit sugarcane fields in Florida eased since the storm has stalled to a crawl in Mexico and will not hit the state until Monday. Volume traded before the end of business hit 746 lots, from the previous tally of 221 lots.
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