20000202

CSCE sugar ends off, fails anew at overhead gap

NEW YORK: CSCE sugar futures finished with small losses on Monday, with key March failing again to fill an overhead chart gap due to brisk origin pricing and sales by small speculators.

"It failed again at the same resistance level. The locals got caught long and there's some fund buying in the switches to bring us back. But in between, there's just a lot of air in there," a veteran broker for a trading house here said.

March sugar shed 0.05 to settle at 5.42 cents a lb, trading 5.59-5.32 cents. May lost 0.07 to 5.52.

July, the only winner for the day, inched up 0.01 to 5.85 cents. October retreated 0.03 to 6.20 and the rest fell back 0.02 cent each.

End-of-the-month fund buying gave sugar an early boost, enabling March to touch its session peak and approach the chart gap in the contract sitting from 5.62-5.65 cents, floor sources said.

But origin pricing, as it had done every time March got to the 5.60 cents level, stepped in again, they said.

Locals who found themselves long bailed. The market was likewise pressured by fund sales derived from a softening of the spreads.

"Fund rolling later in the day supported the market and we managed to come back a little bit because of that," another broker said.

In market news, the latest CFTC Commitment of Traders report showed that as of Jan. 25 speculative funds held a short position of 24,080 lots while smaller speculators were short by 3,662 lots.

Traders said they had been expecting the funds to be short some 30,000 lots and the data seemed to indicate the funds may still be able to expand their short positions in the market.

Market fundamentals remained gloomy though, with plentiful supplies sloshing around the trade unable to find homes.

"The fundamentals still don't look good and that will always weigh in any uptick in this market," a dealer said.

Technically, the overhead gap in March sugar of 5.62-5.65 cents continued to represent resistance while support is seen at the recent low of 5.20 and then 5.00 cents.

Estimated volume traded reached 28,351 lots against the previous estimated total of 27,025 lots.

Call volume touched an estimated 3,515 lots while put volume reached around 1,727 lots.-Reuters