Raw sugar futures closed mixed on Tuesday as nearby months came off on producer and speculative sales, but the sweetener was seen drifting this week due to a lack of market-moving news, brokers said. The New York Board of Trade's key March raw sugar contract lost 0.05 cent to settle at 8.84 cents a lb., trading between 8.80 and 8.92 cents. May sugar fell 0.06 cent to 9.01 cents. Two contracts aside, the rest gained 0.01 to 0.03 cent.
Longer term, sugar prices were seen deriving support from a supply deficit in 2004/05 and expected robust consumer buying in the years ahead, which were expected to boost spot sugar prices above 9.00 cents, and possibly 10 cents, next year.
Futures started at its highest level for the day, but were capped by producer and then speculative sales in the market, floor sources said. "There is still a lot of producer selling above the market, but you can find trade support underneath.
I don't see anything in the way of news to get us out of range-bound trading until the end of the year," a senior trading house dealer said. Dealers said news that Iran tendered for 40,000 tonnes of raw sugar may have also provided some support for the sweetener when it plumbed the day's lows.
Technicians said they felt support in the March contract was at 8.80 and 8.75 cents, while resistance would be at 9.00 and 9.04 cents. Final traded volume hit an estimated 26,343 lots, up from the previous tally of 24,074 lots.
Call volume stood at 7,112 lots while puts hit 3,940 lots. Open interest in the No 11 sugar market shot up 6,622 contracts to 318,498 lots as of November 29. Ethanol futures closed flat, with the November contract ending at 104 cents a gallon.
US domestic sugar prices settled mixed on Tuesday. January sugar fell 0.02 cent to 20.36 cents a lb. and March lost the same to 20.37 cents.
The rest were flat to 0.02 cent easier. Final traded volume touched 127 lots, versus the prior 168 lots.