Raw sugar futures ended easier on Wednesday on investor sales following losses in the crude complex, with brokers saying the market's direction depends heavily on what happens in other commodity markets. Crude prices slid one day after surging to a record because of a larger-than-expected increase in inventories.
However, crude subsequently bounced back a bit. Sugar has kept pace with crude due to a deeply ingrained belief that high oil prices would tempt cane producers to churn out more of the alternate fuel ethanol.
The May sugar contracts shed 0.24 cent to settle at 11.89 cents per lb, moving from 11.79 to 12.18 cents. The key July contract fell 0.20 cent to 12.75 cents, dealing from 12.62 to 12.98 cents. Volume traded in the May contract stood at 5,418 lots at 2:23 pm.
EDT (1823 GMT) while July business amounted to 27,319 lots. On a fundamental level, sugar is looking at another record cane crop in the main center-south region of leading grower Brazil. Global demand is expanding, but spot consumer buying has been soft of late, analysts said.
Futures lost ground from the start of business and a rebound on short covering enabled the market to trim its losses, they said. Sugar also saw some switch trade as investors got rid of positions in the spot might contract. Open interest in May was at 67,346 lots as of April 22, from the previous sessions' 75,352 lots. Technicians see support in the July contract at 12.50 cents, with resistance at 13 and 13.50 cents.Total deals done on Tuesday were at 106,685 lots, the exchange said.
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