20000112CSCE sugar closes mixed in slow dealings

NEW YORK: CSCE sugar futures settled on a mixed note on Monday, with commission house purchases largely offset by producer pricing at the top of the range as the market struggled to find fresh leads in a moribund session.

"The market is vacillating in neutral territory," a broker for a trading house in New York said. "It's trying to find direction."

March shed a measly 0.01 cent to end at 5.83 cents per lb, mired in a 15-point range from 5.93-5.78 cents.

May lost the same to finish at 6.05 cents.

The rest were 0.02-0.06 cent firmer at the close.

Sugar opened slightly higher but origins quickly capped the advance by pricing in at the session highs, floor brokers and dealers said.

"The locals were also playing it from the short side today," a veteran floor dealer said.

At the bottom of the range, local shortcovering gave the market a very modest lift into the end of business, the dealers said.

Raw sugar prices will likely drop to 5.00 cents a lb over the near term due to the heavy burden of bearish fundamentals, the weekly futures report by Salomon Smith Barney said Monday.

Analyst Walter Spilka said production should continue to outstrip consumption and even a dip in output by top producer Brazil would not be enough since there are other countries willing to fill the gap.

"As such, it still looks like sugar prices will move lower and the March sugar futures should approach 5.00 cents," he said in the report.

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

In Asia, sugar dealers in Bangkok said Monday shipments have picked up over the last few days due to purchases by Indonesia of Thai raws.

Indonesia was said to have ordered about 200,000 tonnes of Thai sugar since early last week, they said.

Technicians said resistance in March should be at 5.98 and then the psychologically important barrier of 6.00 cents. Support was seen at 5.60 and then down to 5.50 cents.

Estimated volume was 11,821 lots compared to the estimated total of 15,048 lots previously. Call volume touched 2,418 lots while put volume was estimated at 354 lots.

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