Raw sugar futures settled at a fresh four-month high Monday on investor buying as players positioned themselves for further gains due in part to expected purchases by India in the weeks ahead, brokers said. The key March raw sugar contract climbed 0.16 cent, or 1.22 percent, to finish at 13.28 cents per lb.
On the spot daily charts, it was the highest close for sugar since the start of October when it traded near 14 cents. Trades spanned from 13.11 to 13.35 cents. Volume traded in the March contract reached 49,653 lots at 2:10 pm EST (1910 GMT). May sugar added 0.14 cent to conclude at 13.56 cents.
"The fact that they are going to be importing is a market mover," said Larry Young, an analyst for brokerage Infinity Futures in Chicago. Most brokers estimate sugar imports by India will range from 1.0 to 1.5 million tonnes. Analysts also point to news of a persistent deficit in sugar and that output will not match demand in 2008/09.
They said there is also some tightness in the supply market because the trade is waiting for the start of the harvest in top grower Brazil next month. The sugar market was also boosted by weakness in the dollar amid growing uncertainty over US plans for a fiscal stimulus and a separate scheme to help banks. Technicians feel resistance in the March sugar contract would be at 13.50 and up to 14 cents. They pegged support at 13 and 12.50 cents.
Volume traded Friday in the No 11 sugar market reached 158,474 lots - exchange data. Open interest for No 11 sugar market was at 667,660 lots as of February 6, from the previous tally of 665,916 lots. The domestic No 14 sugar market showed the March contract untraded at 2:10 pm volume on Friday in the No 14 market stood at 83 lots - exchange data.