The raw sugar market will be shut Monday for the New Year holiday. Trading resumes Tuesday.
The New York Board of Trade's benchmark March raw sugar contract climbed 0.18 cent, or 1.2 percent, to close at 14.79 cents a lb., dealing from 14.66 to 14.80 cents. May sugar rose 0.14 to 14.80 cents. Distant months increased from 0.15 to 0.18 cent.
"We're getting ready to challenge 15 (cents)," said James Cordier of Liberty Trading Group.
A dealer for a major financial house said 15 cents in early 2006 now appeared to be a "very realistic target."
Sugar has sustained a rally that has catapulted values to their highest level in nearly 11 years.
The rising use of sugar cane to produce the biofuel ethanol in top grower Brazil, robust demand, a shortfall in China, reduced European output and aggressive buying by funds putting large bets on higher sweetener prices have all combined to fuel the surge, analysts said.
The market edged higher from the opening bell, with trade accounts providing the initial impetus for the rise. Small speculators then piled in as the market headed higher and went home with long positions in the market, dealers said.
"The trade was buying both on the spread and outright. It looks good and ready to go higher once we are done with New Year," a dealer said.
Technicians see resistance in the March contract at 14.90 and 15 cents, with support at 14.50 and 14 cents. Open interest in the No 11 raw sugar market soared 5,630 lots to 538,440 lots as of December 28.
Volume before the close stood at 24,620 lots, down from the previous tally of 38,614 contracts. Call volume reached 13,935 lots and put volume amounted to 7,781 lots.
The ethanol market was largely untraded. US domestic sugar prices ended flat to higher. March rose 0.07 to 22.27 cents a lb. and May was flat at 22.10 cents. The rest were steady to up 0.04 cent.
Volume before the close hit 308 contracts, down from 583 lots previously.