Raw sugar futures in New York ended up at a 2-week peak on Monday but continued to find stiff resistance near the top of its recent range, leaving prices mired in well-trodden ranges, sources said.
The New York Board of Trade's March raw sugar contract settled up 0.34 cent at 11.81 cents per lb its loftiest settlement since November 10 trading from 11.62 to 12.00 cents. May climbed 0.28 cent to finish the day at 11.87 cents, while the rest of the board closed with gains ranging from 0.12 to 0.24 cent.
Floor dealers said bout of speculative buying boosted values to their session peaks, but trade and producer sales emerged at the top of the day's range, limiting the upside interest "Specs were buyers in the but there is just not enough behind it to break above 12.00 cents. Producers are willing sellers near that level," said one floor dealer. Fundamentally, the market has shed more than 40 percent since hitting a 25-year peak at 19.73 cents in February.
The rally prompted farmers in places like Brazil to plant more sugar, leading to a 2006/07 supply glut. The bearish tone in the market was heightened after sugar merchant Czarnikow raised its 2006/07 global sugar surplus forecast to 5.1 million tonnes, from a previous 3.1 million. The International Sugar Organisation pegged it at 5.8 million. Technicians saw initial support for the March contract at 11.50, followed by 11.30, and down to 11 cents. Resistance continued to hold at 12 and then 12.30 cents.
Final estimated volume soared to 61,933 lots, compared with the prior count of 26,341 lots. Call volume reached 6,716 lots and puts hit 6,812 lots. Open interest in the No 11 raw sugar market grew 2,189 lots to 510,026 lots as of November 24. The ethanol market went untraded. US domestic sugar prices closed mostly lower. The January contract lost 0.10 to 19.90 cents per lb and March fell 0.12 to 19.83 cents. With the exception of one unchanged contract, the rest ended with losses ranging from 0.02 to 0.10 cent. Final volume reached 523 lots.