Raw sugar futures finished with healthy gains of more than 2 percent on Tuesday, as investors bet sugar will move higher after consolidating last week's slide to multi-month lows, traders. The May raw sugar contract rose 0.37 cent, or 2.11 percent, to end at 17.88 cents per lb.
Range jumped above recent range to an 18.25 cents high from a low at 17.36 cents. May futures volume was a healthy 43,663 lots. Dollar weakness helped trigger sugar buying early in the session, sending prices to it to highs unseen since March 22 - traders.
Raw sugar futures ruptured the upper band of its recent trading range - charts. Despite some attempts to sell the highs, some fund investors were buying call options and call spreads, lifting futures prices - Alex Oliveira, sugar analyst at Newedge
Locals sell call spreads to funds and then hedge themselves in the futures market - Oliveira. Some physical sugar buying may have also pushed prices up - traders. "The late rally was impressive and may have had its origins in some physical buying," said one sugar trader.
Sudan's state sugar company bought 100,000 tonnes of sugar to fill a domestic production gap. Volume could taper off for the rest of the week because of Passover and Easter holidays - traders. The ICE exchange will be closed on Friday for the Good Friday holiday.
Last Wednesday, May sugar futures slid to a 10-1/2-month low at 16.17 or a 9-month low on the spot continuation chart. The spot contract closed up 6.6 percent that same day, had traded in a sideways consolidation pattern since then. May sugar's slide to the multi-month low was the culmination of a steep decline off of its 29-year high at 30.40 cents on February 1, marking a loss of nearly half its value.
Tuesday's upside range break and close at higher levels was seen as a bullish, at least for the near term - analysts. Total volume fell to 94,333 lots on Monday, down from 107,170 on Friday - ICE data. Open interest in No 11 sugar was lower at 720,781 lots than Friday's 732,698 lots - ICE.