Raw sugar prices banked on late covering by small speculators to end firmer on Wednesday in fairly quiet dealings ahead of the Thanksgiving holiday weekend, brokers said.
The raw sugar market will be shut on Thursday and Friday for the US Thanksgiving holiday. Trading resumes on Monday. The New York Board of Trade's benchmark March raw sugar contract added 0.10 cent to end at 12.15 cents a lb., moving from 12.02 to 12.17 cents.
May sugar rose 0.07 to 12.02 cents. The rest gained 0.02 to 0.08 cent. "It's been very dull except for the late buying by the locals. The market still looks good so we should easily head higher," a long-time floor dealer said.
The market took note of news that broker and analyst Jonathan Kinsman said on Wednesday raw sugar prices could surge to between 14 and 16 cents in part due to increased use of the biofuel ethanol churned out mainly by top sugar grower Brazil.
Kinsman said prices should stay buoyant because of rising demand for sugar, falling stocks, the diversion of cane to ethanol, EU reforms set to cut EU sugar output and the increased flow of funds into the sweetener.
Futures drifted for most of the session and stayed within a few points of unchanged until small speculators covered late, dealers said. "Based on the way we closed, we should get some follow-through (buying) but we'll need more leads going into December," a dealer said.
Volume traded before the close of business stood at 15,762 lots, versus the previous tally of 26,823 contracts. Call volume hit 1,851 contracts and puts amounted to 2,211 lots.
Technicians feel resistance for the March contract would be at 12.22 cents and then 12.25 cents. They pegged support at 11.91 and then the area of 11.85/86 cents.
Open interest in the No 11 raw sugar market rose 2,985 lots to 488,989 lots as of November 22. There were no trades in the ethanol market.
US domestic sugar prices ended mixed.
January fell 0.09 to 21.97 cents a lb. and March was flat at 21.65 cents. The rest were steady to down 0.05 cent. Volume before the end of trade hit 79 lots, from the previous 622 lots.