20000326

CSCE sugar closes weaker as origins cap market

NEW YORK: CSCE raw sugar futures ended with slight losses Friday, after an early advance was scuppered when raws ran into origin and trade selling in the market.

"There was no follow-through in that early move up and we ran into a little bit of origin selling which capped the whole thing," a veteran sugar broker for a trading house here said.

May sugar slipped 0.07 cent to close at 5.38 cents a lb, moving from 5.47-5.32 cents. On Thursday, the contract jumped 0.20 to finish at 5.45 cents. After climbing to a recent peak of 5.42 cents, that was the highest close for benchmark sugar since Feb 9 when it finished at 5.49 cents.

July fell 0.08 to 5.38 cents and October shed 0.09 to 5.73 cents. The rest retreated 0.02 cent.

Sugar tried to extend its gains at the start, but it failed to make its pre-opening call that it would be 0.05 cent higher because origin pricing and trade selling undermined the market, floor sources said.

"(ED & F) Man was selling it and the origins really dumped on the sugar market," one said.

Another floor dealer said: "The producers really whacked it at the top so it couldn't go any further."

Off the lows, spread activity gradually pared the market's losses. "The spreads allowed us to steady up a bit in here," a trader said.

Technically, dealers feel resistance in May sugar would now be at 5.50 cents, the overhead gap from 5.62-5.65 and then the 5.70-cent area. Support remained intact at 5.25-5.35 cents, a place which used to represent resistance.

Estimated final volume reached 24,705 lots versus the previous estimated volume of 34,216 lots. Call volume stood at an estimated 3,640 lots while puts reached around 3,504 lots.

In a bearish bit of industry news, Russia's Acting President Vladimir Putin has signed a resolution setting a special 10 percent duty on raw sugar imports on top of the existing 5.0 percent tariff.

The country's Sugar Producers' Union said in its weekly bulletin on Friday that Russia produced 1,323,200 tonnes of whites sugar from imported raws by March 22, up 764,700 tonnes from the same date last year.

Traders in Tokyo said Friday they expect Thai raw sugar premiums to strengthen in the coming months on seasonally high demand from regular buyers like Japan and hopes that China may start sugar imports after frost damaged its cane crop.

China's expected sugar output in 1999/2000 at 7.6 million tonnes, compared with projected consumption of 9.0 million. While China has ample stocks to fill the deficit, that does not mean they will not resort to imports, the dealers said.

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