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CSCE sugar ends shade up, origins cap upside probe

NEW YORK: CSCE sugar futures settled with only modest gains Wednesday after another attempt to probe an overhead chart gap in key March sugar sputtered due to brisk pricing from South American and Far East origins.

"The producers just pounced on this thing when we got to the top of the range. They were very aggressive in selling sugar, especially when March got to the 5.50 (cents) level," a physical broker for a trading house here said.

Key March settled 0.08 cent higher at 5.40 cents a lb after trading 5.59 to 5.20 cents. May rose 0.04 to 5.54 cents and the rest went out 0.02 cent firmer.

March gapped lower at the start down to support at 5.20 cents, where it bounced as commission house, trade and fund shortcovering swiftly ran it up to the session peak of 5.59 and close to the overhead chart gap of 5.62-5.65 cents.

Brokers said the contract then ran into robust origin pricing from a variety of South American and Far Eastern origins which capped its advance.

"It was all producer-related selling," a dealer for an investment house in New York said.

James Cordier, broker for the Liberty Trading Group, said there was a large chunk of origin selling orders sitting at 5.60 cents "but we did not even reach" that far.

"What doesn't look friendly for the market is that the origin selling is coming in at lower and lower levels," he said, adding most of the orders used to be found at 6.00 cents.

The market is now bracing for the auction in Thailand on Thursday of 292,000 tonnes of quota B sugar for export which could put further pressure on raw sugar futures.

The only bit of physical action was news that Taiwan Sugar Corp. had bought 180,000 tonnes of Australian raws with deliveries divided into six shipments between 2000 and 2001.

Technically, the overhead gap in March sugar of 5.62-5.65 cents represents resistance for the market. Support should be found at 5.20 and all the way down to 5.00 cents.

Estimated volume reached 26,482 lots against the previous estimated total of 18,903 contracts.

Call volume touched an estimated 7,852 lots while put volume reached around 3,548 lots.

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