New York sugar settles at two-week high

Raw sugar futures ended on Tuesday at a two-week high on commodity fund buying fuelled in part by uncertainty over ethanol output in Brazil and storm damage in key exporter Australia, brokers said.
The New York Board of Trade's May raw sugar contract soared 0.40 cent, or 2.4 percent, to end at 17.02 cents a lb., trading from 16.62 to 17.10 cents. On a spot basis, it was the best close for sugar since it settled at 17.18 cents on March 7.
July increased 0.35 to 16.67 cents. The rest of the board added from 0.26 to 0.35 cent. Steve Platt of Archer Financial Services said questions over how much of Brazil's upcoming center-south crop will go into producing the biofuel ethanol, rather than sugar, has combined with worries over the harm caused by Cyclone Larry in northern Australia to buoy values.
"That is still helping to support values," he said. Last year, roughly half of the cane in Brazil went into the manufacture of ethanol. Analysts believe if the summer produces another rally in crude oil prices that will tempt Brazil to funnel more cane into ethanol, which would boost sugar prices.
Sugar contracts opened steadier and a late burst of commodity fund buying enabled the key May contract to breach the 17-cents level for the first time since March, dealers said. "The funds rode it late and the locals went along for the ride.
We should see some follow-through (buying) tomorrow," one trading house broker said. Technical analysts feel resistance in the May contract is at 17.18 and 17.50 cents, with support at 16.30 and 16 cents.
Final volume stood at 49,482 lots, up from the previous tally of 28,924 contracts. In the options ring, call volume hit 9,772 contracts and put volume was at 7,506 lots. Open interest in the No 11 raw sugar market climbed 3,069 lots to 459,475 lots as of March 20.
There were no deals in the ethanol market. US domestic sugar prices ended sharply higher. The May contract surged 0.48 cent to 23.70 cents a lb., while July jumped 0.30 to 23.35 cents. Back months increased 0.05 to 0.27 cent.
Volume at the end of trade stood at 1,223 lots compared with the previous tally of 770 lots.