World Raw Sugar Futures Rise on New York Board of Trade Amid Industry Buying and Fund Buying

Strategic Insights -

As the market bounced back from three-week lows, world raw sugar futures rose on the New York Board of Trade, driven by buying from the industry and funds. The March contract settled up 13 points at 8.94 cents a pound, while May closed up 14 points at 9.34 cents. Industry players, including traders and producers, were actively buying, while local traders switched from short to long positions and funds bought May futures.

Key Takeaways:

  • The market saw a significant rebound from three-week lows, with the March contract settling up 13 points at 8.94 cents a pound.
  • Funds and small speculators stood net long 105,000 lots on Thursday's close, below a record 123,000 lots at Monday's end.
  • The March/May spread worked at 37 to 40 points May over and settled at 40 points, versus 39 points on Wednesday.
  • Massive open interest in March is being pruned as funds roll into May or simply liquidate, with less than four holiday-shortened weeks to expiration.
  • Shipments of sugar include 751,645 tons of very high and very, very high polarization raws and 160,950 tons of white crystal sugar.
  • The EU awarded 241,000 tons of export licenses in Thursday's tender, and traders expect Indian and Pakistani importers to purchase more Brazilian raws.
  • Imperial Sugar Co. reported net income of $6.5 million or $0.59 per diluted share for its quarter ended Dec. 31, above a year earlier.

Statistics:

  • March open interest shrank 14,918 lots Wednesday while May interest grew 4,661 lots and total interest fell 7,566 lots to 414,325 lots.
  • The recent record open interest was 427,831 lots on Monday.
  • Ships have been named to handle 1.07 million tons of sugar over the next month, versus 1.21 million in last week's report.
  • 756,145 tons are to be shipped from Santos port and 179,554 tons from Maceio.
  • 751,645 tons of very high and very, very high polarization raws and 160,950 tons of white crystal sugar will be shipped.

Sources:

  • "New York, Feb 03, 2005 (ODJ via COMTEX) (Dow Jones)--"