Raw sugar futures settled lower Friday on sales sparked by a strong dollar as players mull if the market's recovery from the fall this week to an eight-month low can be sustained into next week, brokers said. May raw sugar contract fell 0.39 cent or by 2 percent to close at 18.64 cents per lb. May moved from 18.23 to 19.45 cents.
Volume traded in May reached 51,543 lots at 1:46 pm EDT (1746 GMT).Since trading at a 29-year top of 30.40 cents on February 1, the market tumbled 41.90 percent in value to its session low on Wednesday of 17.66 cents. On the week, the May contract lost 5.2 percent from its close last Friday at 19.67 cents.
James Cordier, an analyst for brokers optionsellers.com in Florida, said sugar will rely on the dollar for direction. He added cash offtake and news out of major sugar players Brazil and India will also provide leads for sugar next week. "The longer we stay at this level (of 18 cents and above), end-users will say that's a good buy," said Cordier. On a technical level, the May contract has run into solid support in the area of 17.50 to 17.10 cents.
"The dollar was up and some people took some cash off the table. The question now is do we revisit and check out 17 or do we get a retracement rally back to 20," a dealer said. Analysts said market keeping eye on revived physical demand. Technicians feel support in the May contract is at 18, 17.50 and 17.10 cents.
They pegged resistance at 19.50 and 20 cents. Total volume Thursday reached 157,529 lots, versus the previous 124,503 lots - ICE data. Open interest in the No 11 sugar market was at 750,205 lots as of March 18, from the prior 778,606 contracts - ICE.
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