CSCE raw sugar futures settled on Tuesday at a fresh seven-month high on persistent speculative fund buying, which appears poised to shove the market higher this week, analysts said.
CSCE May sugar climbed 0.06 cent to end at 6.80 cents a lb, trading from 6.67 to 6.82 cents.
The spot contract settled at its highest level since trading around 6.81 cents in early August 2003. July surged 0.12 to 6.63 cents. Distant months gained 0.03 to 0.12 cent.
"Slowly but surely, it's going higher," said Judy Ganes of commodity firm J. Ganes Consulting, adding the spot May contract will likely take aim at hitting the psychological target of 7.00 cents.
The fundamental outlook for the sweetener has improved slightly on expected falls in output in producers like India and Thailand, with Ganes saying sweetener fundamentals are becoming "a little sounder."
Floor sources said a steady drumbeat of speculative buying continued to drive sugar higher, although the pace of purchases by speculators in the spot month seems to be slowing down.
"The specs seems to be shifting their buying into July and October because they're getting ready for May to go off the board in a month and a half," one said. The May contract expires April 30.
Automatic buy orders are in the market would likely be triggered if the May contract closed above 6.81 cents, dealers said.
Technicians said resistance in May was at 6.81 cents, then the 7.00 cent area.
Support was at 6.66/68 cents, 6.59 and then 6.50 cents.
Floor dealers said the final estimated volume reached 40,553 lots, against the previous tally of 38,941 lots.
They said call volume touched 12,599 lots, while puts hit 8,934 lots.
Open interest in the No 11 sugar market rose 6,050 lots to 258,980 lots as of March 15.
US domestic sugar futures ended mostly higher on Tuesday.
May sugar gained 0.11 to 20.66 cents a lb while July rose 0.04 to 20.72 cents.
Except for two contracts, the rest were firmer by 0.01 to 0.06 cent.
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