Raw sugar futures closed higher on Friday on investment fund buying inspired in part by strong oil prices, but profit-taking and trade sales knocked the market below the 14-cents level, brokers said. The October raw sugar contract climbed 0.38 cent or by 2.7 percent to finish at 13.99 cents per lb, dealing from 13.70 to 14.15 cents.
Volume traded in the October contract was at 38,812 lots at 2:16 pm EDT (1816 GMT). "Sugar is getting ready to do better," said Sterling Smith, analyst for brokers FuturesOne in Chicago. Steve Platt, analyst for Archer Financial Services, said the next move in sugar will depend on energy markets and futures may have room to move higher since it is still a "little bit cheap compared to other markets." A fresh spike in crude combined with investment fund buying to rocket the October contract over 14 cents, dealers said.
* But the advance was beaten back and even though the market is substantially up on the day, trade sales and profit-taking by investors has sharply pared its gains, the dealers said. Fundamentally, sugar market conditions are tightening due to disappointing Brazilian yields, the use of cane to ethanol, lower Indian cane area, and lower US beet output, consultancy Kingsman SA said.