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CSCE sugar ends firmer, March expiry eyed

NEW YORK: CSCE sugar futures closed Tuesday with slight gains due to modest speculative interest as the market seemingly took a breather after its recent fall to new lows.

Key May clawed back all of its lost ground in the previous session by rising 0.11 cent to end at 4.99 cents, trading 5.03-4.91 cents. Monday, it declined the same to close at 4.88 cents and just above its fresh lifetime nadir of 4.84 cents.

The rest ended 0.11 firmer to 0.01 easier.

"We had a nice correction. The funds stopped pushing it down. The close (of the May contract) below 5.00 cents is a little bit negative though," said Patrick Funaro of the Brazil desk of FIMAT Futures here.

A combination of trade and speculative buying gave sugar a slight pop which was in turn capped by scale-up producer sales, floor brokers said.

Trade and speculative funds sought to shove May above 5.00 cents, but just could not muster the strength to do so.

Most of the focus was on expiration of front March and talk that around two cargoes of sugar were to be delivered against the tape in New York.

March expired 0.05 down at 4.65 cents a lb, trading from 4.82 and its new contract low of 4.62.

Open interest in the March contract as of February 28 fell 9,385 to 5,557 lots while May's open interest rose 1,897 to 107,433 lots. Some dealers feel the open interest will have likely been trimmed by a few hundred lots.

Analysts said the poor expiration of March and the inability of key May to make any kind of headway north does not augur well for sugar futures.

"We need to close above 5.20 (cents) to have a chance on the upside," Funaro said.

In physical business, Uzbekistan bought 50,000 tonnes of whites for $247 a tonne for March/April shipment.

Chartists said support in May sugar should be at the contract low of 4.84 and in layers down to 4.50 cents. Below that, 4.35-4.40 cents lurks and then the psychologically vital 4.00 cents mark. Resistance was now pegged at 5.20 cents.

Estimated volume reached 26,484 lots against the previous estimated volume of 40,581 lots. Call volume touched an estimated 3,995 lots while put volume hit an estimated 3,195 lots.

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