Raw sugar futures finished on Friday at an 11-week high due to robust trade and fund buying, and brokers said the market could move higher on follow-through purchases next week. The New York Board of Trade's July raw sugar contract shot up 0.21 cent, or 2.4 percent, to settle at 8.88 cents a lb., moving from 8.70 to 8.92 cents. It was the best close for sugar on a spot basis since it settled at 9.12 cents on March 17.
October surged 0.19 cent to 8.96 cents. The rest increased 0.09 to 0.14 cent. "The trade started it by buying the July/October spread. That sort of set it off and the funds jumped in. We could move higher, but you have to wonder if the producers start coming in more aggressively the higher we go," a long-time floor dealer said.
Sugar has moved higher on steady consumer buying and brokers feel the pace of interest from countries like Russia and possibly China will persist in the weeks ahead. The market plowed north from the bell. Trade buying of the difference between the front July and second position October contracts provided the platform for the rally, dealers said.
"The trade bought it and then we got fund short-covering. The fund buying then kicked off (automatic buy order) stops at 8.70 and 8.80 (cents in the July contract)," one dealer said. Technicians see support in the July contract at 8.50 and 8.60 cents, with resistance at 8.90 and then 9 cents.
Estimated volume just before the close of trade stood at 69,503 lots, up from the prior 45,591 lots. Call volume reached 10,903 lots and puts came to 4,146 lots. Open interest in the No 11 raw sugar market fell 1,146 lots to 362,385 contracts as of June 2.
Ethanol futures closed steady, with the June contract settling at 117 cents a gallon. US domestic sugar futures closed mostly lower. July rose 0.05 to 22.55 cents a lb. while September lost 0.14 cent to 22.13 cents.
Except for one contract, the back months declined from 0.01 to 0.14 cent. Estimated final volume amounted to 1,050 lots, from the prior count of 233 lots.
Comments
Comments are closed.