Raw sugar futures closed lower Friday on investor sales sparked in part by a firm dollar as the trade mulled if follow-through sales would depress the sweetener going into next week, brokers said. The March raw sugar contract retreated 0.27 cent to finish at 22.47 cents per lb. The contract traded from 22.23 to 23 cents. March contract volume hit 39,260 lots at 1:54 pm EST (1854 GMT).
Sterling Smith, an analyst for brokers Country Hedging Inc in Minnesota, said sugar is "having trouble getting upside momentum". The March contract could test initial support at 22.10 and 22 cents, he said. Smith and other analysts said sugar market players would need to see what kind of consumer interest develops as the market works lower. A fall below 22 cents would bring the key support area of 21.78 cents into play - brokers.
A major factor to support sugar values is demand, especially from No 1 consumer India. Sugar imports by India of sugar are seen ranging from 3.0 million to 7.0 million tonnes through September 2010. Demand is also seen coming from Bangladesh, Pakistan, Indonesia, Mexico and the United States. Pakistan said it is likely to start importing 500,000 tonnes of white sugar in December.
Another major reason for the bullish tone are crop problems in top producer and exporter Brazil. Technicians see resistance in the March sugar contract at 24 and 24.50 cents. Volume traded Thursday in the No 11 sugar market was at 67,661 lots, from the prior 85,127 lots - exchange data. Open interest in the No 11 sugar market was at 769,871 lots as of November 19, from the previous 775,195 contracts - exchange data.
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