Raw sugar futures closed flat Friday as early pressure from investor sales inspired by a firm dollar were offset by late short-covering and suspected consumer buying in the market, analysts said. The March raw sugar contract finished at 22.81 cents per lb, unchanged from the revised level of the previous session. March contract moving from 22.19 to 22.90 cents.
March volume traded was at 42,231 lots at 1:56 pm EDT (1756 GMT). "Sugar is just consolidating," said James Cordier, an analyst for the Liberty Trading Group in Florida. Sugar pulled back after climbing in the previous session following release of stronger-than-expected third-quarter US GDP. Some analysts believe technical pressure should push sugar back down to test key support around 21 cents.
Future movement in the market will also be dictated by the dollar's performance and lingering jitters over a global economy struggling to recover from the worst recession in 70 years. Market bulls believe though that sugar values should climb in the months ahead due to poor harvests in India and rains haunt top grower Brazil. Import demand is also not seen falling off. Indian buyers are poised to sign deals for imports of up to 2.0 million tonnes of raw sugar.
Countries like Pakistan, Bangladesh and Indonesia are seen buying sugar as well. Technicians feel resistance in the March contract is at 23 and 24 cents, with support at 21.50 and 21.18 cents. Volume traded Thursday in the No 11 sugar market was at 72,812 lots, from the prior 101,729 lots - exchange data. Open interest in the No 11 sugar market was at 773,140 lots as of October 29, from the previous 769,258 contracts - exchange data.
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