Raw sugar futures finished near their session lows on Friday on speculative sales and there seems no indication the market will bust out of its trading band next week, brokers said.
The New York Board of Trade's May raw sugar contract fell 0.18 cent to settle at 16.44 cents a lb, near the bottom of its 16.41 to 16.62 cents band. July shed 0.14 to 16.13 cents. One contract aside, the rest were flat to 0.12 cent lower.
"It's real dull. We could be (stuck between) 16 and 17 cents (basis May) for a while," said James Corridor of Liberty Trading Group. Analysts feel sugar will go higher in the long term due to a supply shortfall and the diversion by top grower Brazil of cane into the production of the biofuel ethanol given steep increases in crude prices.
But the market has turned a lot quieter since surging in February. At that time, the price of sugar had surged to within a hair of a 25-year peak of 20 cents, and then subsequently dropped to levels near 16 cents.
Sugar tumbled at the start to fall to the low for the session on sales by small speculators, dealers said. But once trade buying put a floor in the market, the same speculators covered their positions on the way back.
"The locals were dealing it between the ranges although we could probably work a little lower from here," a dealer said. Technical analysts feel resistance in the May contract is at 17 cents, with support at 16.30 and 16 cents.
Volume an hour before the close hit 18,220 lots, from the previous tally of 29,968 contracts. In the options ring, call volume hit 5,830 contracts and put volume was at 3,133 lots. Open interest in the No 11 raw sugar market rose 654 lots to 458,927 lots as of March 16.
There were no trades in the ethanol market. US domestic sugar prices ended flat to higher. The May contract rose 0.15 cent to 23.20 cents a lb while July added 0.05 to 23 cents. The rest were flat to up 0.10 cent. Volume an hour prior to the end of trade stood at 120 lots compared to the previous tally of 299 lots.
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