Raw sugar futures settled at a two-week high on Monday on sustained speculative and trade buying, although bearish fundamentals may keep a lid on the advance in the weeks ahead, brokers said. The New York Board of Trade's key July raw sugar contract jumped 0.46 cent, or 5.3 percent, to end at 9.02 cents per lb., moving from 8.52 to 9.09 cents.
It was the highest finish for the market on a spot basis since June. October sugar soared 0.58 to 9.56 cents. Back months increased 0.38 to 0.55 cent. The Intercontinental Exchange's NYBOT electronic market for sugar showed the July contract up 0.44 cent to 9.00 cents at 1:19 pm EDT (1719 GMT).
"It declined a little too fast (recently)," said Marquis Sonnet of trading firm Sonnet and Co "I don't see any long-term move (higher) on this thing." Once the July contract raced over its recent high of 8.74 cents, automatic buy orders kicked in to power futures higher, dealers said. Some switch trade was seen although it seems the bulk of commodity index funds with positions in sugar have transferred their exposure to the back months.
In rollover trade, open interest in July fell 9,653 lots to 110,142 lots as of June 15. Analysts' feel that by midweek, open interest will be under 100,000 lots and only a modest amount will be delivered when the July contract goes off the board on June 29.
Fundamentally, analysts said the trade sees the glut in the market as keeping a firm cap on any sustained rally. Technicians pegged support in the July contract at 8.74 and 8.50 cents, with resistance at 9.10 cents. Open-outcry volume around noon was at 21,546 lots, from the previous tally of 25,460 lots.
Call volume was 7,967 lots and puts 7,743 lots. NYBOT said on Friday's screen trade were 75,894 lots and total volume 101,354 lots. Open interest in the No 11 raw sugar market rose 791 lots to 676,646 lots as of June 15. Ethanol futures were untreated. US domestic sugar prices ended mostly lower. The September contract rose 0.01 to 21.28 cents per lb. while November shed 0.02 to 21.04 cents.
The rest lost 0.01 to 0.07 cent. Screen volume traded on Friday in the No 14 sugar market hit 54 lots and pit volume was at 16 lots. The electronic No 14 sugar market saw the November contract flat at 21.05 cents at 1:20 pm.