Raw sugar futures finished up at an eight-week high Wednesday on investor fund buying, and brokers said the market may have enough momentum to bound higher in the days ahead. Sterling Smith, an analyst for brokers FuturesOne in Chicago, said sugar has become more attractive for investment funds after its fall to recent lows.
Spot July added 0.54 cent to close at 11.60 cents, ranging between 11.06 and 11.66 cents. Volume traded in the October contract amounted to 77,583 lots at 2:32 pm EDT (1832 GMT) while July hit 31,747 lots. On the fundamental front, commodity analyst F.O. Licht said the balance going forward will depend to a great degree on how cane top grower Brazil will use in the production of sugar and the alternate fuel ethanol.
Output in major producer India is expected to decline, demand is rising steadily, and more fund interest in the sweetener is seen boosting prices, the analysts said.
Smith said the recent fall in sugar is likely exaggerated and the market is now seemingly poised to head the other way. "The general environment (in sugar) is improving," he said. Technicians put resistance in October delivery at 13 and 13.40 cents, with support at 12.50 and 12 cents.
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