Raw sugar futures relied on investment fund buying to end higher Thursday, inspired by a rally in the soft commodity sector whose main catalyst was the weak dollar, brokers said. The benchmark October raw sugar contract rose 0.30 cent to end at 12.95 cents per lb, trading from 12.62 to 13.09 cents.
Spot July added 0.20 cent to close at 11.68 cents, dealing from 11.37 to 11.80 cents. Volume traded in the October contract was at 53,307 lots at 1:53 pm EDT (1753 GMT) while July hit 11,919 lots. Larry Young, senior trade of brokerage Infinity Futures in Chicago, said a truckers' strike in Brazil provided some support for the market, but the weakening dollar stoked the advance in the market.
Traders said there may be some pressure stemming from the liquidation of remaining positions in the spot July contract, which is due to expire on Monday. Fundamentally, the sugar market derives support from fear that rains in top grower Brazil may reduce production and yields in the 2008/09 season.
The other positive factors would be a rise in consumer demand, lower output this season in major grower India, higher output of the alternate fuel ethanol, and more fund interest in the sugar market. Technicians believe resistance in the October contract was at 13.40 cents, with support at 12.50 and 12 cents.
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