Last on Wednesday, March closed at 9.30 cents, the highest for sugar on a spot weekly basis since ending at 9.32 cents on October 12, 2004. May sugar rose 0.08 cent to end at 9.54 cents. The rest of the board increased from 0.01 or 0.05 cent. "Producers kept selling, even though it was going over the same ground. They were selling everything from March '05 to July '06. But that's been the case every day," said one trader. Traders said a few funds decided take some profits as sugar stretched toward its recent highs, capping on Monday's gains. "It wasn't all black and white, some of the funds were selling too," one trader said.
A lack of sugar-relevant news meant participants resorted to trading technical factors, and with a hefty long position outstanding many funds wanted to protect those positions to reverse a bout of selling on Friday.
March open interest rose to whopping 216,863 lots as of January 28. Analysts said they thought it could take the entire month of February to unwind the positions and roll them forward into later-dated contracts.
Consequently, they said, the March contract may see further pressure if players aggressively roll long sugar positions to other contract months. Technicians said resistance in the March contract would be at last week's 9.32 high and then 9.50 cents, while support was seen at 9.12 and then down to 9.02 cents.
Sugar volume stood at 43,438 lots, less than on Friday's 61,519 lots. Call volume reached 6,418 lots and puts came to 4,397 contracts. Open interest in the No 11 sugar market rose by 7,145 lots to an all-time record of 424,778 contracts as of January 28.
Ethanol futures finished flat, with February at 95 cents a gallon. US domestic sugar closed mostly lower. March ended off 0.02 cent at 20.53 cents a lb and May finished flat at 20.60 cents.
Back months settled flat to 0.06 cent lower. Volume amounted to 105 contracts, up from Friday's count of 58 lots.