Raw sugar futures closed higher Thursday on investor buying as the market rebounded following a correction in its rally to a 29-year top, brokers said. The March raw sugar contract climbed 0.64 cent to settle at 29 cents per lb. The contract traded from 28.45 to 29.24 cents. It was an inside day since the range is within Wednesday's 28.16 to 29.40 cents band.
Monday, the contract hit a 29-year top at 30.10 cents. Volume traded in March reached 49,114 lots at 1:47 pm EST (1847 GMT). "It's a choppy affair," said James Cordier, an analyst for brokers optionsellers.com in Florida. "There are no supplies. It's extremely tight for the next four weeks," he said.
Sugar prices will reach historic milestones by the end of March 2010 as a global supply shortage tightens its grip on the market and increases investor fervour for the sweetener, a Reuters poll showed. Cordier said investment funds are "going to buy dips until the trend changes."
He said the rally may eventually be blunted once more supplies flow into the market. Tight supplies and healthy demand underpin sugar. Buying seen from India, Iraq and Indonesia. Other importers are Pakistan, Egypt, Mexico and the Philippines. United States seen buying sugar by mid-spring. Rollover business in March contract expected soon. March expires February 26.
Focus then will be on deliveries in March contract. Support in March contract seen at 28 and 27 cents. Resistance at 30.10 and 32 cents. Total volume Wednesday reached 158,858 lots, compared with the previous 115,947 lots - ICE data. Open interest in the No 11 sugar market at 849,490 lots as of January 27, from prior 847,422 contracts - ICE.
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