Raw sugar futures settled mixed on Wednesday on modest investor and possibly producer sales as the market consolidated after hitting a four-month top, brokers said. The key March raw sugar contract shed 0.04 cent to end at 12.87 cents per lb. Trades spanned from 12.60 to 12.89 cents. Volume traded in the March contract reached 39,234 lots at 1:59 pm EST (1859 GMT).
May sugar rose 0.04 cent to close at 13.20 cents. James Cordier, analyst for brokers optionsellers.com in Florida, said a lack of follow-through consumer and fund buying knocked sugar back. The key March contract had hit a session peak on Monday and Tuesday at 13.05 cents. Failure at that level prompted some players to cash in their gains - analysts. But the market's pullback is not really severe because most expect sugar to challenge the highs again.
One key reason is that the global sugar market will move deeper into deficit next season which will help support prices although the global economic downturn will dampen demand, a Reuters poll showed. Many market players are also waiting for news of buying by India, one of the world's top consumers of sugar. Technicians feel resistance in the March sugar contract would be at 13.00/13.05 and 13.50 cents, with support in the March contract at 12 and 11.50 cents.
Volume traded Tuesday in the No 11 sugar market reached 100,048 lots - exchange data. Open interest for No 11 sugar market was at 670,233 lots as of January 27, from the previous tally of 676,120 lots. The domestic No 14 sugar market showed the March contract untraded at 1:59 pm volume on Tuesday in the No 14 market stood at 699 lots - exchange data.