Raw sugar futures closed lower Thursday on producer and investor sales as the market extended a correction after touching a four-month high earlier this week, brokers said. The key March raw sugar contract dropped 0.28 cent to finish at 12.59 cents per lb.
Trades spanned from 12.51 to 12.87 cents. Volume traded in the March contract reached 33,364 lots at 2:09 pm EST (1909 GMT). May sugar fell 0.23 cent to close at 12.97 cents. Ralph Preston, analyst at HeritageWestFutures.com in San Diego, said sugar may mount a challenge of levels above 13 cents in the March contract.
The key March contract had hit a session peak on Monday and Tuesday at 13.05 cents before backing off. "We should have a solid run on a close (of 13 cents or higher)," Preston said. The market is also monitoring news for possible signs of buying by leading consumer India.
India's cabinet deferred a decision to ease imports of raw sugar and traders there said this would boost domestic prices. Analysts and sugar industry officials in Brazil said its key center-south region is likely to devote a bigger share of the 2009-10 crop to making sugar than last season given the prospect of rising prices and exports.
Analysts feel sugar values will go up because the market will move deeper into deficit next season although the global economic downturn will dampen demand, a Reuters poll showed. 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 Wednesday in the No 11 sugar market reached 86,909 lots - exchange data. Open interest for No 11 sugar market was at 676,439 lots as of January 28, from the previous tally of 670,233 lots. The domestic No 14 sugar market showed the March contract down 0.16 cent at 19.90 cents at 2:10 pm volume on Wednesday in the No 14 market stood at 80 lots - exchange data.