Raw sugar prices closed firmer on Monday on buying by small speculators and the market could edge up after a brief holiday break tomorrow, brokers said. The raw sugar market is shut on Tuesday for US Independence Day. Business resumes on Wednesday.
The New York Board of Trade's October raw sugar contract went up 0.28 cent to finish at 16.62 cents per lb, moving from 16.41 to 16.72 cents. March rose 0.26 to 16.94 cents. Back months gained 0.22 or 0.24 cent. "It's all been about local buying and based on the way we closed, we could see some follow-through when we come back on Wednesday," a veteran floor dealer said.
Market participants said the supply/demand equation is in rough balance and the trade will be keeping an eye on how demand shapes up in 2006/07. Sugar contracts moved higher from the bell as small speculators sought to bid up futures in the hope that they could trigger automatic buy orders as they get near 17 cents, basis October, dealers said.
But the market could not move any further above its highs for the day and some of the speculators opted to cash in their gains with the holiday looming, they said. Deliveries against the expired July contract were also modest, with only 1,223 contracts delivered from Argentina and El Salvador. Technicians saw support in the October contract at 16 and 15.90 cents, with resistance at 16.75 and 17 cents.
Volume before the close stood at 25,135 lots, against the previous 48,947 contracts. Call volume touched 12,173 lots and puts hit 3,322 lots. Open interest in the No 11 raw sugar market dove 7,986 lots to 420,576 lots as of June 30. No deals were seen in the ethanol market. US domestic sugar prices ended mixed. September added 0.02 to 23.17 cents per lb and November was steady at 22.50 cents. Two contracts aside, the rest were flat. Volume before the close hit 61 lots, from the prior tally of 41 lots.
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