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CSCE sugar closes mixed, trade eyes options expiry

NEW YORK: CSCE sugar futures settled mixed on Friday after a lackluster session, with spot March finishing within a hair of the 5.50 cents strike price in options expiry here.

March went out 0.03 cent easier at 5.49 cents a lb after trading a tight 5.54-5.49 cents. Most-active May gained 0.01 to 5.67 cents and the rest closed 0.02 firmer to 0.05 weaker.

"There's nothing going on," Marius Sonnen of Sonnen and Co. Inc. here said, adding there was a "vested interest in the option (players) to keep it (prices) at certain levels."

Physical brokers said the market wallowed for the most part in the absence of any news.

"There was just a distinct lack of follow-through from everybody," a physical broker for a trading house here said.

Locals were content to job sugar futures and the only other action seen was some March/May spread activity.

On a fundamental note, trade house ED & F Man said Friday the world sugar surplus is expected to total 7.72 million tonnes, raw value, in 1999/2000, down from a September estimate of 8.85 million.

Consumption was seen 1.1 million tonnes higher at 128.41 million, with China and Russia accounting for most of the increase, it said.

The lower surplus estimate follows the announcement by the International Sugar Organisation (ISO) that the world sugar surplus in 1999/2000 (Oct/Sept) is likely to be revised down to 3.5 million tonnes from 4.76 million tonnes in its first estimate last on November.

Brazil's centre-south sugar cane output is unlikely to fall much more than five percent in 2000/01 (May/April) from this year's record 263 million tonnes following recent abundant rainfall, Man added.

On a technical basis, March retained support at the session low and 20-day moving average of 5.48 cents. The next target would be the 5.20 cents mark.

Resistance would be at 5.60 cents and then the 50-day moving average of 5.72 cents.

Estimated volume traded in the CSCE sugar market reached 14,682 lots from the previous estimated total of 25,011 lots.

Call volume touched an estimated 3,483 lots while put volume reached around 1,634 lots.

The CSCE is a subsidiary of the New York Board of Trade.-Reuters