LONDON, Oct 11: London white sugar futures rose on speculator buying at midday on Tuesday, and European traders said the market appeared overbought due to a lack of physical business.

They said NYBOT raw sugar futures could open some 0.05 cents a lb higher on the back of stronger London futures prices.

Traders noted speculative buying against producer selling, and noted that the drop in the net speculative long position in last Friday’s Commitments of Traders (COT) report was seen as a positive signal for the market.

Some traders are bullish because the COT figure was down, said one trader.

It’s hard to understand why the market is rallying again — and why folks are so bullish, one European broker said.

The answer, we believe, lies in the fact that the next raws futures expiry will be in four months time. At that time we will see convergence between futures and physicals; until then, the futures have a life of their own.—Reuters