New York sugar up as switches dominate

Raw sugar futures ended mixed Tuesday in a session featuring switch trade as investors moved out of positions in the spot contract since it goes off the board at the end of the month, brokers said.
The New York Board of Trade's May raw sugar contract was the only loser by dipping 0.01 to end at 17 cents a lb, in a band from 16.98 to 17.26 cents. It was the lowest close for sugar on the spot daily charts since ending at 16.85 cents on March 23.
The rest went up, with second position July up 0.04 to 17.19 cents. Back months added from 0.03 to 0.14 cent.
"The guys have been hitting the spread and that has provided most of the activity in this thing," a long-time floor broker said. "We're going to get more spreads until May is no longer there."
The switch trade saw open interest in the May contract sink 19,984 lots to 148,360 lots as of April 10. The contract expires on April 28.
Analysts said the fundamental outlook for sugar would likely push prices higher since most expect leading producer Brazil to use more cane to produce the biofuel ethanol given forecasts of high crude prices this summer.
"I still like it fundamentally and it really comes down to Brazil and the ethanol equation," one said. "Any improvement in production due to higher prices will only kick in after this year."
Speculative accounts would press the market lower but trade accounts would buy the spread and provide support for futures, dealers said.
Technical analysts feel resistance in the May contract is at 17.65/70 cents, with support at 16.90 and 16.80 cents.
Volume before the close stood at 60,989 lots, against the previous count of 101,673 contracts. Call volume touched 14,764 lots, while puts hit 9,973 lots.
Open interest in the No 11 raw sugar market dropped 5,596 lots to 481,753 lots as of April 10.
There were no deals in the ethanol market.
US domestic sugar prices ended lower. The July contract gained 0.22 to 23.62 cents a lb and September rose 0.15 to 23.64 cents. The rest went up 0.01 to 0.20 cent. Volume before the close hit 377 lots, from the prior count of 542 lots.