NYBOT raw sugar futures settled higher on Tuesday on fund and trade buying, with brokers saying the focus will be fixed firmly on players rolling positions out of the spot contract.
October sugar rose 0.05 cent to close at 7.71 cents a lb, ranging from 7.56 to 7.82 cents. Active March added 0.08 to 8.66 cents, trading 8.48 to 8.67 cents. Distant months were flat to 0.12 cent firmer.
"The spread basically is the main focus," said Mike McDougall, senior vice-president of FIMAT USA Inc.
Follow-through liquidation nudged sugar down to its lows, but trade and fund buying stabilised sugar and led it back to its highs for the day, floor sources said.
Analysts said that the liquidation tied to players rolling positions out of October has died down for the moment and that trade and fund accounts were the main buyers in switching positions from the front month to the back months.
Open interest in October dove 15,172 lots to 93,675 lots as of September 13 while interest in March rose 14,577 to 124,542 lots. October goes off the board on September 30. "It's been all switches and I don't see the pattern changing for the next two weeks," one broker said.
Longer-term market fundamentals look more bullish due to an anticipated supply deficit in 2004/05 and large sugar imports by India, the world's biggest consumer of the sweetener.
Traders saw resistance in October at 8.10 and the contract high of 8.43 cents.
Support was at 7.50 and 7.35 cents. Estimated volume just before the market closed hit 57,538 lots, from 88,085 lots previously. Call volume hit 5,269 lots while puts stood at 2,785 lots.
Open interest rose 1,156 lots to 287,982 lots as of September 13. Ethanol futures closed flat with the September contract finishing at 98.80 cents a gallon. Open interest in the ethanol market was unchanged at four lots as of September 13.
US domestic sugar prices settled firmer on Tuesday. November sugar added 0.07 to 20.72 cents a lb and January rose 0.04 to 20.74 cents.
Except for one contract, distant months gained 0.02 to 0.07 cent. Volume traded before the conclusion of trade hit 362 lots, from the prior 305 lots.
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