Raw sugar futures finished higher on Friday as trade and speculative short-covering enabled the sweetener to rebound from its session lows and the market could drift in a band next week, brokers said. The New York Board of Trade's July raw sugar contract rose 0.09 cent to end at 8.35 cents a lb, moving from 8.22 to 8.37 cents. On Thursday, the contract closed at 8.26 cents in the lowest finish for sugar on a spot basis since settling at 8.08 cents on April 15. October gained 0.07 cent to 8.43 cents. Except for one contract, back months increased 0.04 cent. Early follow-through speculative sales nudged the market to its lows but trade accounts showed up and stabilised futures, brokers said.
"We bounced off of that from short-covering by the locals and the specs. It's hard to say which way we go from here. I think the producers will cap it at 8.50 (cents, basis July) and the trade is there at the 8.21/22 (cents area)," a long-time floor dealer said. Fundamentally, most players were looking for support for an advance from consumer buying. Russian purchases are seen accelerating as the country hits its peak demand period this summer from increased consumption by soft drink and ice cream companies.
"The specs and the locals got us back after holding support. Once the key players get back to their trading desks next week, we'll get some leads on our direction," a dealer said. Market players had been attending festivities linked to the annual Sugar Club dinner here last Wednesday. Technicians feel support in the July contract is at 8.21/22 and 8.18 cents. Resistance was at 8.50 and 8.73 cents. Estimated volume before the market closed amounted to 23,068 lots, from the previous 30,599 lots. Call volume at that time was 4,921 lots and puts stood at 2,033 lots.
Open interest in the No 11 raw sugar market dove 2,384 lots to 352,371 contracts as of May 12. Ethanol futures finished flat, with the June ethanol contract settling at 117 cents a gallon.
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