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CSCE sugar finishes shade up, focus on rollovers

NEW YORK: CSCE sugar futures settled modestly higher on Tuesday as a dash of fund buying gave raws some pop although activity was dominated by rollovers as players got ready for expiration of spot March next week.

"The focus really is spreads. You're not getting any sustained movement either way," a floor broker said.

Key May sugar went out 0.07 up to end at 5.24 cents a lb, trading 5.27-5.18 cents. Spot March rose 0.11 to close at the session peak of 5.14 cents, with the day's low at 5.03 cents.

Back months were up 0.04-0.08 cent.

Coming out of a holiday weekend, the market opened on a steady note as fund and trade buying of the spreads allowed raws to head north, floor brokers said. The market had been shut Monday for Presidents Day.

"It was pretty much rolling. Some of the funds were buying the March/May while the trade was in the May/July," a senior physical dealer said.

Open interest in March as of February 18 fell 4,658 to 39,073 lots while May's open interest rose 2,399 to 91,064.

Prices will likely come under further pressure over the near term because of origin sales, the weekly futures report by Salomon Smith Barney made available Tuesday said.

"It still looks like prices will move somewhat lower, as there is a lot of sugar moving to the market from countries such as Thailand and Cuba," said Salomon analyst Walter Spilka.

Salomon is a unit of financial giant Citigroup C.N.

The Trade Ministry of top importer Russia said Tuesday it has opened an investigation into sugar imports ahead of the introduction of measures to protect domestic producers against excessive imports of raws.

On the physical front, a trade source in Taipei said Tuesday that Taiwan Sugar Corp. will tender on Friday to import 30,000 tonnes of raws for arrival before May 15.

On a technical basis, traders said they feel May sugar faces resistance at the recent high of 5.30 and then an overhead gap at 5.62-5.65 cents.

Support in May would be at the new lifetime low of 5.10, 5.00 and then 4.90 cents.

Estimated volume traded in the CSCE sugar market reached 29,863 lots, from Friday's estimated volume of 30,781 lots. But brokers said that of the total, a little over 7,000 were AAs.

Call volume touched an estimated 5,426 lots while put volume reached around 2,037 lots. -Reuters