Raw sugar futures closed up and near session highs on Monday on trade buying after the Easter break as investors looked toward increased switch trade from players moving positions out of the spot contract, brokers said. The sugar market was shut Good Friday.
In the open-outcry pit, New York Board of Trade May raw sugars settled up 0.18 cent at 9.98 cents per lb after trading 9.81 to 9.99 cents. July added 0.11 to 10.01 cents and the rest rose 0.11 to 0.15 cent.
In the Intercontinental Exchange's NYBOT electronic market for sugar, its May contract advanced 0.16 cent to 9.96 cents at 1:15 pm EDT (1715 GMT). "There was a lot of buying by the trade of the May/July spread. The really big-time rollovers kick off this week and that should be our main focus this week and next," said a dealer for a brokerage house.
Rollovers and switches take place when investors transfer positions out of the spot contract before it goes off the board. The May contract, this will persist until it goes off the board April 30. The switch may put pressure on sugar from investors moving short positions to the back months. According to the weekly CFTC commitments of traders' data, the net short positions in sugar by speculators expanded to 26,669 lots from 14,061 lots in the prior week.
On a fundamental level, sugar prices are being weighed down by a glut in 2006/07 and the situation could become even more burdensome in 2007/08 due to large crops in top grower Brazil and India, the world's largest consumer of the sweetener.
Technicians put support for the May contract in the open-outcry pit at 9.50 and 9.40 cents, with resistance at 10 and 10.50 cents. Open interest in the No 11 raw sugar market surged 10,586 lots to 679,992 contracts as of April 5.
Open-outcry volume traded around noon stood at 13,869 lots, from the prior open-outcry count of 23,491 lots. Call volume was 6,454 lots and puts at 3,902 lots. NYBOT said on Thursday's electronic trade were 47,561 lots and total volume 71,052 lots. No deals were done in the ethanol market. US domestic sugar prices ended mixed.
The May contract slipped 0.03 cent to 21.05 cents per lb and July lost the same to 20.90 cents. The rest were flat to 0.02 cent firmer. The electronic No 14 sugar market was untraded as of 1:16 pm.
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