Raw sugar futures closed higher Tuesday on investor short-covering as the market seems poised to extend a technical rebound after falling 8 consecutive weeks, brokers said. The May raw sugar contract gained 0.44 cent or 2.66 percent to end at 16.98 cents per lb. Trading range from 16.60 to 17.25 cents. May volume at 51,041 lots at 2:11 pm (1811 GMT).
Most-active July increased 0.38 cent to finish at 17.23 cents. Sterling Smith, an analyst for brokerage Country Hedging Inc in Minnesota, said sugar is "steady and stabilising." He said the market seems to be taking aim at a rebound toward the area of 17.30 cents and higher.
Technical report by Thomson Reuters said the rebound could go up to 17.36 cents, then a break over that "signals a further test of 17.92 cents." Close over 16.70 cents could mean a move toward the 18-cent area, one technician said. Market had fallen sharply since rallying to a 29-year top at 30.40 cents on February 1. Raws nearly halved in value while posting worst quarterly loss since 1985.
Spot raw sugar contract slid to an 11-month low at 15.46 cents about two weeks ago. A report by Newedge Research Group said: "A close above 17.30 would open the door to a challenge of 17.70." Market participants monitoring pace of harvest in the prime center-south region of Brazil.
Technically, support in the May contract seen at 16.50 and 16 cents. Resistance pegged at 17.50 and 18 cents. Volume traded Monday hit 200,619 lots, versus the previous tally of 129,163 lots - ICE data. Open interest in No 11 raw sugar market was at 690,859 lots as of Monday, from the prior tally of 692,113 lots - exchange data.