October sugar rose 0.03 cent to end at 7.67 cents a lb, dealing between 7.59 cents and 7.71 cents. On Tuesday, the contract ended at 7.64 cents, the lowest close for sugar on a spot basis since it settled at 7.63 cents on June 28.
March sugar added 0.02 cent to 8.20 cents. Except for one contract, the rest increased 0.01 cent or 0.02 cent. "It was just going back and forth. The specs would dump it lightly and then buy it back at the lows," a senior floor dealer said.
Market fundamentals are seen by most players as bullish due to expectations of a supply deficit in 2004/05, but a hefty long position by the funds and the imminent start of switch business in spot October meant the market may see some weakness in the days ahead, traders said.
The October contract is due to expire on September 30. Open interest in October stood at 160,921 lots as of Tuesday, down 2,136 lots on the day.
Follow-through speculative sales nudged sugar down to its lows for the session at the start of business, but speculative buying began pushing the sweetener into positive ground, brokers said.
"It was Very light. There was no rush by anybody to do anything. You have good support below, but there seems to be no interest in shoving the market up," one said. Brokers said resistance in the October contract should be in the region of 7.79/80 cents and then the technical target of 7.84/87 cents.
They pegged support at 7.55 cents and 7.50 cents. Final estimated volume hit 17,018 lots, down from Tuesday's tally of 22,116 lots. Call volume reached 2,986 lots and puts stood at 1,639 lots.
Open interest fell 551 lots to 291,198 lots as of Tuesday. Ethanol futures finished mostly unchanged, with the September contract closing unchanged at 98.80 cents a gallon. Open interest remained at six lots as of Tuesday.
US domestic sugar prices ended mostly higher. November sugar rose 0.10 cent to 20.32 cents a lb and January added 0.06 cent to 20.58 cents.
The rest were flat to 0.05 cent firmer. Final volume was 301 lots, versus the previous 193 lots.