Raw sugar futures ended higher on Friday on investor short-covering as the market churned higher after sharp losses caused by the world's worst financial crisis in 80 years, brokers said. The March raws sugar contract climbed 0.48 cent or by 3.7 percent to finish at 11.58 cents per lb, dealing from 11.18 to 11.74 cents. Last Friday, the contract closed at 11.23 cents.
On the week, the contract gained 3.1 percent in value. May sugar added 0.49 to 11.89 cents. Volume traded in the March contract hit 43,152 lots at 1:55 pm EDT (1755 GMT). "Sugar got beat up pretty intensely," said Sterling Smith, an analyst for brokers FuturesOne in Chicago.
He said the market is consolidating with a higher bias, but futures remain vulnerable because of severe losses caused by deleveraging in the recent round of commodity liquidation. Sugar futures marched to their highs for the day on investor buying, but that faded and the sweetener spent the rest of the day with only modest gains - traders.
Once the market got over 11.60 cents, basis March, authomatic buy orders kicked in and boosted the market to fresh intra-day highs, the dealers said. Consumer interest was perking up as inquiries come in from the Middle East and Asia. Egypt and India recently booked orders. India is also said to be looking for more cargoes although they are now well-stocked. The trade is also keeping an eye on the United States because tight supplies in the country will likely force it to buy sugar sometime in the 2008/09 period.
Technicians pegged support in the March contract at 11 cents, with resistance at 12.30 and 13 cents. Volume Thursday in the No 11 sugar market at 63,429 lots - exchange data. Open interest in the No 11 raw sugar market fell 1,220 lots to 670,517 lot as of October 16 - ICE Futures US. The domestic No 14 sugar market showed the January contract down 0.15 cent at 21.25 cents at 1:56 pm volume traded Thursday in the No 14 market was at 1,571 lots, the exchange said.