New York sugar settles up

Raw sugar futures finished up and near a two-month high Tuesday on investment fund buying spurred by a sizzling rally in crude oil and the strong tone of the commodity sector, brokers said. "It's all oil. You can't ignore what's going on there," said James Cordier of brokers Liberty Trading Group after oil prices zoomed to a record above $88 per barrel.
He said a close in sugar above 10.25 cents in the March contract, may suck in more fund buying in the days ahead. Analysts said resurgent oil prices could eventually push many producers like those in top grower Brazil to manufacture more of the alternate fuel ethanol.
ICE Futures actively traded electronic March sugar surged 0.20 cent to trade at 10.15 cents per lb at 1:41 pm EDT (1741 GMT), moving from 9.95 to 10.18 cents. Open-outcry March sugar gained 0.20 cent or 2.0 percent to end at 10.15 cents after trading from 10.07 to 10.18 cents. It was the highest spot sugar settlement since August. May sugar gained 0.18 to 10.15 cents as well.
Floor sources said the initial impetus for the buying in the market came from trade and speculative fund accounts, with the purchases being sustained going into the close of trade. "The followed oil up. They saw it take off and it became a case of 'follow the leader'," one explained. For several weeks, sugar has been stuck in a range running from 9.40 to 10.20 cents in the March contract.
"It looks like we're going to test the upper end of that trading band. If we get over 10.25 then we could take out 10.50 and 10.75 cents," a trader said. Technicians pegged resistance in the March electronic sugar contract at 10.20 and 10.50 cents, with support at 10 and 9.60 cents.
Final estimated open-outcry volume was put at 7,953 lots versus the prior tally of 7,284 lots. Call volume was 19,868 lots and put volume amounted to 21,742 contracts. Screen trades hit 37,091 lots and total volume Monday was 44,375 lots. Open interest in the No 11 sugar market climbed 5,416 lots to 675,579 contracts as of October 15. Ethanol futures were untraded.
The US electronic domestic No 14 sugar market showed the January contract up 0.08 cent at 20.56 cents at 1:40 pm Screen volume on Monday reached 206 lots while no lots were traded in the pit.