NEW YORK, June 18: Raw sugar futures closed higher Friday on speculative fund buying, but steady producer sales kept the market on a tight leash although further gains may nudge values up next week, brokers said.
The New York Board of Trade’s July raw sugar contract rose 0.05 cent to end at 8.91 cents a lb, dealing from 8.85 to 8.92 cents. October surged 0.13 to 9.06 cents. Distant months went up 0.06 to 0.09 cent.
You’ve got the funds buying hard, but we’ve got loads of producer selling, a long-time investment house dealer said, adding talk of consumer buying from countries like China and Russia may buoy sentiment.
The steady pace of such purchases will probably keep prices supported, analysts said. The trade is divided on the supply situation, with market bulls pointing to a shortage and bears saying the equation is finely balanced.
Sugar opened nearly flat and then headed north as speculative fund and trade buying believed linked to consumer purchases boosted values, dealers said.
The funds got in and the locals went long right with them. The buying in October is particularly strong and that has dragged sugar higher as a result, one explained.
The market also saw a lot of switch trade as players rolled positions out of July before it goes off the board at the end of the month. Open interest in the July contract sank 5,838 lots to 79,039 contracts as of June 16 while interest in October surged 10,562 to 176,401 contracts.—Reuters
