"You have to remember that it is still a bull market. Just because we're doing a lot of spreads doesn't mean we go south. There's also very good cash activity and that's keeping the market supported," a dealer for a brokerage house said.
Fundamentally, analysts said, a supply deficit in the sweetener coupled with robust demand from major consumers like Pakistan and India kept values buoyant.
Follow-through speculative liquidation at the start pushed the market down to its lows, but the trade provided a floor and small speculators who found themselves too short in sugar were forced to cover their positions, floor sources said.
"It's still holding steady. We still have some liquidating to do in March, but the market has responded well every time we tested the lows," one explained. On switches, the open interest in March slid 11,922 lots to 47,884 contracts as of February 16.
Technicians see resistance in the March contract at 8.98 and 9.03 cents. Support was at 8.80 and down to 8.50 cents. Volume traded just before the market closed for the day stood at 34,271 lots, versus the prior 77,422 lots.
Call volume hit 2,115 lots and puts came to 2,253 contracts. Open interest in the No 11 sugar market tumbled 6,851 lots to 382,184 contracts as of February 16. Ethanol futures ended unchanged with the February contract finishing at 95 cents a gallon.
US domestic sugar futures closed mostly firmer on Thursday. May go up 0.09 cent to 20.34 cents a lb while July rose 0.06 to 20.62 cents. Except for one contract, the rest were flat to 0.03 cent firmer.
Volume traded before the market shut hit 860 lots, up from 108 lots previously.