Raw sugar futures settled higher Monday on late short-covering and switch trade as players moved out of positions in the spot contract before it expires next week, brokers said. The key October raw sugar contract rose 0.17 cent to finish at 16.24 cents per lb. The contract ranged between 15.77 and 16.28 cents.
Volume traded in the October contract stood at 63,734 lots at 2:00 pm EDT (1800 GMT). Ralph Preston, an analyst for HeritageWestFutures.com in San Diego, California said investors were also waiting to take their cue from a US Federal Reserve meeting this week.
On switches, the market is mulling how much sugar will be delivered when the July contract expires on June 30. Open interest in the July contract was at 105,731 lots as of June 19, down 9,035 lots from the previous session. Brokers believe open interest in the July contract is down to 90,000 to 97,000 lots by the close on Monday.
Brokers said deliveries would depend on the spread between the spot July and second position October sugar contracts. A total of 842,252 tonnes or 16,579 lots was delivered at expiration of the May contract. Large deliveries are usually seen as bearish for sugar futures, but the May delivery was interpreted as bullish because the trade felt the sugar had a home in India.
Technicians put resistance in the October contract at 16.30 cents, with 16.71 cents further afield. They pegged support at 16 and 15.50 cents. Volume traded Friday in the No 11 sugar market was 97,730 lots, from the prior 82,123 lots - the exchange said. Open interest in the No 11 sugar market was at 748,888 lots as of June 19, from the prior 748,982 contracts - exchange data.