New York sugar settles with small gain in tight band

Raw sugar futures closed with minimal gains on Tuesday as funds and trade bought to cover short positions, but origins sold above the market in a relatively slow session, traders said. "We've been stuck in a range since Thursday. There was some light fund coverage, maybe about 2,000 lots. But there was good origin selling above the market, with trade buying supporting the market," said one sugar dealer.
The raw sugar market was shut Monday for the US Memorial Day holiday.
The New York Board of Trade's July raw sugar contract rose 0.01 cent to settle at 8.76 cents a lb., after moving in a slim range from 8.71 to 8.79 cents. The range was barely changed from Friday's trading band.
October gained 0.02 cent to end at 8.87 cents. The rest settled from 0.02 lower to 0.01 cent higher.
Traders said they expected the range to continue constraining sugar futures, with healthy demand, especially from Russia, supporting prices at the low end, and scale up origin selling from Brazil and other producers capping the upside.
Once sugar does break out of its narrow trading band, some traders said, they think the upside is favoured.
"Holding this range, it may take another stab higher. The locals still see the funds as being net short with specs. But the funds are holding the larger net short position," a sugar trader said.
Technicians see support in the July contract at 8.50 and 8.60 cents, with resistance at 8.90 and then 9.00 cents.
Estimated sugar volume came to about 36,380 lots on Tuesday, more than the 20,532 traded on Friday. Call volume was 3,688 lots and puts stood at 3,955 lots.
Open interest in the No 11 raw sugar market rose 35 lots to a revised 362,847 contracts as of May 27.
Ethanol futures closed flat, with the June contract ending unchanged at 117 cents a gallon.
US domestic sugar futures settled mixed. July was flat at 22.35 cents a lb. and September stood unchanged at 22.12 cents. The rest ranged from even to down 0.01 cent.
Volume before the end of trade hit 825 lots, down from 970 lots previously.