New York sugar closes firm

Raw sugar futures finished higher on Wednesday on trade and speculative buying as the spot contract appeared headed for an orderly expiration next week, brokers said. The New York Board of Trade's May raw sugar contract climbed 0.20 cent to end at 9.52 cents per lb, in a band from 9.37 to 9.55 cents. July rose 0.09 to 9.25 cents.
The rest gained 0.02 to 0.06 cent. On the IntercontinentalExchange's NYBOT electronic market for sugar, its May contract rose 0.20 cent to 9.52 cents at 1:19 pm, dealing from 9.32 to 9.55 cents.
"We have some short-covering going on," James Corridor, president of brokers Liberty Trading Group, said, adding the spot May contract will probably have deliveries of between 5,000 and 10,000 lots when it goes off the board on Monday. Open interest in the May contract dove 12,241 lots to 40,179 lots as of Tuesday while interest in July rose 3,493 to 388,438 lots. Traders estimated actual open interest in May at the close on Wednesday was around 35,000 lots.
Analysts said it was hard to see sugar marching higher, given a glut in the market during the 2007/08 season. Merchant Sudden had already forecast the 2007/08 center-south cane crop of top grower Brazil at an all-time high of 410 million to 420 million tonnes.
Analyst Kinsman SA predicted a world surplus of 9.48 million tonnes for the year to March 2008, up from its forecast of 8.78 million tonnes in 2006/07. "The supply side is bearish," Corridor said, but he said the question was whether all that bearish news has been priced into the market.
Technicians felt support in the May contract was at 9.30 and 9.00 cents, while resistance was at 9.80 and 10 cents. Open-outcry volume in sugar around noon stood at 16,848 lots, down from the previous tally of 33,045 lots.
Call volume was 17,653 lots and puts 5,434 lots. NYBOT said on Tuesday's screen trade were 74,346 lots and total volume 107,411 lots. Open interest in the No 11 raw sugar market fell 2,564 lots to 692,549 lots as of April 24.
No deals were done in the ethanol market. US domestic sugar prices ended mixed. The July contract rose 0.01 to 20.91 cents per lb, while September was unchanged at 20.82 cents.
Two contracts aside, the rest were flat. Screen volume traded on Tuesday in the No 14 sugar market hit 278 lots and open-outcry deals were 16 lots. On the electronic No 14 sugar market, the July contract was flat at 20.90 cents at 1:19 pm.