New York sugar closes at week high

Raw sugar futures banked on buying by commodity funds and speculators to finish Thursday at a one-week high and follow-through interest may nudge the market up Friday, brokers said.
The New York Board of Trade's July raw sugar contract rose 0.27 cent or 1.5 percent to settle at 17.65 cents a lb, trading from 17.38 to 17.87 cents. October added the same to 17.98 cents. The rest increased 0.22 to 0.26 cent.
"The funds piled into it and the locals followed them, but we got some producer pricing from Brazil to knock us back a little. I still like the upside of this market though," an investment house analyst said.
On the fundamental front, the market took note of news that the International Sugar Organisation believes prices will trade between 15 and 17 cents in 2006/07 and the group has revised down its forecast for the 2005/06 global sugar deficit to 0.966 million tonnes.
Another key driver for prices would be how much cane in top grower Brazil will go into producing the biofuel ethanol, especially with crude prices gyrating wildly in response to geopolitical crisis in the Middle East.
With white sugar prices scaling record peaks, raw sugar futures bounded higher on buying by investment funds. Small speculators joined the buying spree initially to run the intra-day high to its loftiest level in six weeks, the dealers said.
"The locals really tried to push it up, but it stalled and they got slammed around pretty good," one explained. Technicians believe support in the July contract is at 17 and 16.80/90 cents, with resistance at 18.11 and 18.50 cents.
Volume before the close stood at 52,962 lots, against the previous count of 31,603 contracts. Call volume touched 10,621 lots and puts hit 11,672 lots. Open interest in the No 11 raw sugar contract rose 76 to 491,639 lots as of May 10.
There were no deals in the ethanol market although the exchange said business should pick up later in the year.
US domestic sugar prices ended mixed. July slipped 0.06 cent to 23.55 cents a lb and September fell 0.08 to 23.55 cents as well. One contract aside, the rest were flat. Volume before the close hit 81 lots, from the prior 17 lots.