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CSCE sugar ends near peak on trade buying, Russia

NEW YORK: CSCE raw sugar futures finished Thursday near or at the day's highs on the back of brisk spread activity and trade buying likely tied to purchases by top importer Russia.

"It's a very good close. The market is slowly taking out all the (origin) selling," said Patrick Funaro, vice-president of the Latin American desk at FIMAT Futures. "We're set up for the next move on the upside."

May sugar settled 0.13 up at the session high of 5.55 cents a lb with the intra-day nadir standing at 5.47 cents.

July went out 0.08 higher to 5.50 cents.

The rest were either 0.07 or 0.04 cent firmer, except for October 2001 which lost 0.02 to 6.40 cents.

Sugar gapped to the top of the range right at the opening bell on early trade buying, but backed off when local selling stepped in, floor brokers said.

The market steadied up though and marched anew to its highs as a result of trade buying and spread action, with Cargill said to be a particularly active player in the spreads, they said.

"It looks like Russian buying," said Funaro.

Dealers said top importer Russia has rushed into the market to snap up cargoes of raws to beat the imposition of an additional 10 percent duty on raw sugar imports which goes into effect on April 24.

The tax is on top of the existing 5.0 percent duty for raw sugar and will be in effect until June 14. From June 15, this will be replaced by a seasonal 45 percent duty to remain in force until December 15.

"It looks like a lot of activity has to do with Russia," a physical broker added. "I think they're trying to sneak the sugar in before those duties go up and stays there until December."

May sugar is now poised, on a technical basis, to fill that overhead gap of 5.62-5.65 cents, basis May, and probably make some headway toward the area of 5.75-5.80 cents, according to Funaro.

"You had very, very constructive activity," he said.

Funaro feels the area of 5.40 cents in the May contract will make up the first line of support.

Estimated final volume reached 24,893 lots, against the previous estimated volume of 21,917 lots.

Sugar option volume touched an estimated 2,286 lots while put volume reached an estimated 1,040 lots.

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