New York sugar recoils from losses to settle firm

NYBOT raw sugar futures closed higher on Monday as speculative and trade buying believed tied to some cash interest erased the losses in the market, with operators saying sugar could grind higher in the coming days.
July sugar rose 0.21 cent to finish at 7.03 cents a lb, moving from 6.73 to 7.04 cents. On Friday, the contract had hit a year high of 7.34 cents before settling at 6.82 cents.
October, the new benchmark contract, surged 0.27 cent to close at 7.65 cents. Back months added 0.21 to 0.26 cent. "We bounced a bit after on Fridays debacle," said Mike McDougall, senior vice-president of FIMAT USA Inc.
Brokers said trade buying emerged in sugar after the market tumbled further after the bell and some felt news of Libya's upcoming tender for 100,000 tonnes white sugar and an import quota of 125,000 tonnes of raw sugar from Ukraine may have aided sentiment.
When trade buying stabilised futures, speculative short covering stepped in to shove the market higher going into the close of business, they said. "Its come back but well have to see if it can sustain itself," a dealer said.
Separately, the market also saw switch trade as players rolled positions out of July and into the back months.
Open interest in July sank 10,447 lots to 49,469 lots as of June 18 while interest in October climbed 4,927 to 151,098 lots.
July expires on June 30. Technicians feel resistance in the active October contract would be at 7.68 cents, with support at 7.30 and 7.25 cents.
Final estimated volume was at 52,459 contracts, from the prior tally of 76,240 lots.
Call volume hit 6,875 lots while puts touched 2,387 lots. Open interest in the No 11 sugar market fell 4,387 to 282,194 lots as of June 18. Ethanol futures all ended softer with the June ethanol contract dropping 1.40 cents to 82.50 cents a gallon.
Open interest in the ethanol market fell one to 496 lots as of June 18. On Fridays traded volume stood at one lot. US domestic sugar prices finished mixed on Monday. September fell 0.07 to 19.88 cents a lb while November shed 0.02 cent to 20.37 cents.
Except for one contract, the rest were unchanged. Final traded volume was 748 lots against the previous 403 lots.