The New York Board of Trade's March raw sugar contract climbed 0.30 cent, or 2.47 percent, to finish at 12.45 cents a lb., dealing between 12.28 and new lifetime high of 12.49 cents.
It was the highest close for sugar on the spot weekly charts since it traded around the same level in December 1997. May sugar sprang up 0.32 cent to 12.34 cents, having also hit a contract high of 12.36 cents.
Back months surged between 0.21 and 0.36 cent, with all but one contract posting a new lifetime high.
"You got the funds driving this thing, and the trade is doing some buying as well. It's going to stay steady, even though we are heavily overbought and could use a pullback," an investment house analyst said.
Sugar has staged a blistering rally and some analysts are forecasting prices could soar to between 14 and 16 cents due to supplies getting hit by the rising use of cane to produce the biofuel ethanol, especially in leading sugar producer Brazil.
Increasing demand for sugar, reforms in the European Union that will likely slice EU sugar output, drought that could reduce production in key exporters Brazil and Thailand, and the seemingly insatiable appetite of funds for sugar were seen keeping values high.
Raw sugar futures charged higher from the start as players got back after a long holiday break. The raw sugar market was closed last on Thursday and Friday for the US Thanksgiving Day holiday.
A rally in London white sugar prices late last week provided the initial catalyst for the market, traders said. "The producers backed away from the market, and this left the field clear for the funds," a dealer said, adding automatic computer-generated buy orders kicked in as sugar moved up.
Volume traded before the close of business stood at 56,240 lots, versus the previous tally of 24,689 contracts. Call volume hit 8,192 contracts and puts amounted to 16,961 lots.
Technicians felt resistance for the March contract would be at 12.22 cents and then 12.25 cents. They pegged support at 11.91 and then the area of 11.85/86 cents.
Open interest in the No 11 raw sugar market jumped 5,491 lots to 494,480 lots as of November 23. No trades were done in the ethanol market.
US domestic sugar prices ended mostly softer.
January fell 0.10 to 21.87 cents a lb. and March slid 0.20 to 21.45 cents. Three contracts aside, the rest lost 0.09 to 0.16 cent. Volume before the end of trade hit 405 lots, up from the previous 107 lots.