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CSCE sugar ends mixed as spec-led rally sputters

NEW YORK: CSCE sugar futures settled mixed on Wednesday after a speculative-led surge ran into a wall of solid origin and trade sales, fund profit-taking and local liquidation.

"It came again to a screaming halt," Marius Sonnen of Sonnen and Co. Inc. here said. "It ran into producer pricing and that is basically capping the market."

May sugar SBKO ended 0.05 cent firmer at 5.12 cents a lb after trading 5.29-5.07 cents. July SBN0 gained the same to 5.22 and October increased 0.01 to 5.63 cents. Back months fell 0.02 or 0.03 cent.

The market popped higher and took out stops after the reopening as speculative fund buying finally pushed May sugar past resistance at 5.15-5.16 cents, an area representing its recent highs, floor sources and brokers said.

Once May spiked up to 5.29 cents, robust trade/origin selling, profit-taking and local long liquidation dragged sugar right back down, they said.

"The rally was quickly extinguished when we got to the highs so much that it closed pretty much where it opened," a trading house broker here said, adding every rally the market may stage in the future now "becomes suspect."

Physical business remained slack, with only routine deals being done in the market, brokers said.

The market took note of news that the Philippines' National Food Authority said Wednesday it would seek fresh bids for the export of 30,000 tonnes of raws and 10,000 tonnes of refined sugar for March to July shipment.

On a technical basis, dealers put resistance in May initially at the 20-day moving average of 5.20 cents. Above that, the contract must pierce the 40-day moving average of 5.43 cents and all the way up to 5.50 cents, the level from which the market broke down before.

They said support should be at 4.90 and then the contract low of 4.84 cents. Below that would be 4.50 cents.

Estimated volume 23,706 lots against Tuesday's tally of 17,086 lots.

Call volume touched an estimated 3,621 lots while put volume hit an estimated 1,949 lots.

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