Raw sugar futures settled firmer on Monday on mostly switch business as investors gradually moved positions out of the spot contract before its expiration at the end of the month, brokers said. The May sugar contract rose 0.03 cent to end at 12.37 cents per lb, moving from 12.27 to 12.62 cents.
The active July contract added 0.07 cent to close at 13.01 cents, dealing from 12.85 to 13.20 cents. Volume traded in the May contract stood at 17,965 lots at 2:27 pm EDT (1827 GMT) while business in July hit 14,795 lots. "Almost all of the trades done was in the switch and it looks like it's going to be like this the whole week," a dealer for a major brokerage house said.
Investors who have no intention of taking delivery of sugar are moving positions from the May contract to July and the rest of the board. Open interest in May was at 156,101 lots as of April 11, from the previous sessions' 188,052 lots. July's open interest stood at 386,641 lots.
The rollovers are seen occupying the market's attention for now after recent spikes in crude prices and the commodity sector likewise boosted sugar futures, dealers said. Some analysts feel that once the rollovers are done, the steady investment fund buying should again hoist sugar higher and the benchmark July contract may mount a run toward the 13.80 to 14 cents region.
"We're down to about 120,000 lots or so (in May) and more than two weeks to go. I know it's a function of the spread, but it looks like the amount (to be delivered) is going to be small," a trading house dealer said. Technicians said contract would be at 12.80 and 12.50 cents, with resistance at 13.50 and 13.80 cents.
Total deals done Friday was at 150,644 lots, the exchange said. Open interest in the No 11 raw sugar market dropped 7,500 lots to 957,574 contracts as of April 11. The US electronic domestic No 14 sugar market showed no trades at 2:24 pm. Volume traded in the No 14 market on Friday was at 125 lots, the exchange said.