Raw sugar futures finished mixed on Wednesday as mild profit-taking and producer sales kept key October in negative territory, but the sweetener is still poised to hit the psychological 10-cents level, analysts said. NYBOT's October sugar futures contract eased 0.01 cent to conclude at 9.95 cents a lb.; near the top of its trading band running from 9.85 to 9.96 cents.
On Tuesday, the contract ended at 9.96 cents in the best close for sugar on a spot basis since finishing at 10 cents on February 5, 2001.
March rose 0.04 cent to 9.92 cents. Except for one contract, the back months were up 0.02 or 0.04 cent. "They're looking for this market to take another crack at 10 cents," a long-time dealer for a major trading house said.
"It's hard to stand in its way." Sugar has roared up in a rally fuelled by robust consumer and fund buying. Analysts said the strong level of demand and expectations that top grower Brazil may divert more cane into ethanol due to high crude prices should boost sugar's value.
Futures lost ground at the start of trade as speculative profit taking hit the market, dealers said. "It was a very short correction because the trade and the funds came right back in at the lows," one said.
On a technical level, analysts feel resistance in October would be at 10 cents. Support was at 9.85 and 9.75 cents.
Volume traded before the close of business hit 30,268 lots, compared to the prior country of 49,751 lots. Call volume amounted to 2,970 lots and put contract volume hit 2,191 lots.
Open interest in the No 11 raw sugar market shot up 10,756 lots to 424,133 contracts as of July 26. Ethanol futures were not traded for the 18th day in a row, with any quotes given in its spot September contract.
US domestic sugar prices ended mixed anew. September rose 0.14 to 21.74 cents a lb. While November eased 0.01 to 20.61 cents. Except for two contracts, the back months settled flat.
Volume traded before the close of business hit 370 lots, versus the previous tally of 477 lots.
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