NYBOT raw sugar futures closed higher on Friday as trade buying enabled the market to rebound from a one-month low, and the sweetener should use the bounce to grind higher next week, brokers said.
The benchmark March raw sugar contract rose 0.04 cent to end at 8.60 cents a lb., trading from 8.55 to 8.69 cents. May gain the same to 8.76 cents. One contract aside, the rest increased 0.02 cent.
"We finally found a level where the trade was willing to buy it," said James Corridor, an analyst for Liberty Trading Group, adding the market should be able to work its way up further to 8.80 cents, basis March, next week.
While analysts are now expecting sugar output and consumption in 2004/05 to be roughly in balance, analysts feel the outlook for the market would still be bullish since consumer buying is expected to remain strong.
Floor sources said sugar opened on a steady note and then trade accounts began pushing the market higher. Small speculators covered their positions to bump prices to their highs for the day, the sources said.
"Once the locals pushed sugar up to its highs, they decided to cash in their gains since it is the end of the month and we have the weekend coming up," a trading house dealer said.
Call volume at that time stood at 5,789 lots while puts reached 5,303 lots. Ethanol futures closed unchanged with the November contract settling at 145 cents a gallon. US domestic sugar finished mixed on Friday.
January sugar fell 0.09 cent to 20.41 cents a lb and March was flat at 20.52 cents. Two contracts aside, the rest closed flat. Traded volume before the market closed for the day hit some 322 lots, versus 328 lots previously.