Raw sugar futures ended easier early on Wednesday on investor sales following early losses in the crude complex, with brokers saying the market's direction depends heavily on what happens in other commodity markets.
"We're the tail on the pony. When crude rallies, we go up. When it comes off, we go down as well. Tomorrow, we'll take a look at the other markets and go from there," said a dealer for a major trading house.
Sugar has kept pace with crude due to a deeply ingrained belief that high oil prices would tempt cane producers to churn out more of the alternate fuel ethanol.
The May sugar contract shed 0.24 cent to settle at 11.89 cents per lb, moving from 11.79 to 12.18 cents. The key July contract fell 0.20 cent to 12.75 cents, dealing from 12.62 to 12.98 cents. Volume traded in the May contract stood at 5,418 lots at 2:23 pm EDT (1823 GMT) while July business amounted to 27,319 lots.
On a fundamental level, sugar is looking at another record cane crop in the main center-south region of leading grower Brazil. Global demand is expanding, but spot consumer buying has been soft of late, analysts said. Open interest in May was at 67,346 lots as of April 22, from the previous sessions' 75,352 lots. Technicians see support in the July contract at 12.50 cents, with resistance at 13 and 13.50 cents.
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