NYBOT raw sugar futures settled on Wednesday near a 19-month high on trade and fund buying, with the sweetener seen staying strong given the market's bullish fundamentals, analysts said.
October sugar climbed 0.11 cent to finish at 8.39 cents a lb, dealing from 8.28 to a new lifetime high of 8.48 cents. It was the best close for sugar on a spot basis since ending at 8.44 cents on March 3, 2003.
Active March rose 0.05 cent to 8.98 cents, moving between 8.95 and a fresh contract peak of 9.10 cents. The rest increased 0.04 to 0.11 cent. Mike McDougall, senior vice-president of FIMAT USA Inc, said trade buying provided the initial impetus for sugar, "which may indicate physical activity."
"(Then) the funds kicked in," he added. Sugar prices had motored higher due to a supply deficit in the 2004/05 season, with the International Sugar Organisation saying in a report last week that the outlook for the market "is more constructive than it has been" in over 10 years.
Scale-up producer sales from exporters in Brazil and Thailand sought to cap the advance in sugar and pared its gains, floor sources said. Separately, traders said the market would be looking at expiration of the October contract on Thursday.
Open interest in October slid 5,137 lots to 17,324 lots as of September 28 while interest in March climbed 4,212 to 195,469 lots. Traders believe resistance in March would be at 9.50 and then the psychological target of 10 cents.
Support is seen at 8.85 and 8.69 cents. Final estimated volume hit 49,015 lots, from 56,701 lots previously. Call volume was 7,004 lots while puts reached 6,634 lots. Open interest rose seven lots to 299,887 lots as of September 28.
Ethanol futures closed flat, with the September contract ending at 100 cents a gallon. US domestic sugar prices finished easier on Wednesday. November sugar fell 0.02 to 20.43 cents a lb and January slipped 0.06 to 20.40 cents.
Except for one contract, the rest declined 0.03 to 0.15 cent. Final volume stood at 603 lots, up from 177 lots previously.