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CSCE sugar ends mixed, trade braces for expiry

NEW YORK: CSCE sugar futures finished mixed Thursday in modest two-way trade, with most players content to keep spot March close to the 5.50 cents strike price ahead of options expiry on Friday.

Spot March sugar went out 0.03 up to end at 5.52 cents a lb, trading in a tight seven-point range from 5.55-5.48 cents.

Most active May slipped 0.01 to 5.66 cents, moving from 5.70-5.63 cents.

July gained 0.02 to 5.96 cents, October rose 0.01 to 6.24 cents and the rest were 0.01 cent easier each.

"The market seems locked into the 5.50 (cents) level before options expiry tomorrow," a physical trader with an investment house in New York said.

Early purchases at the start of business, with Louis Dreyfus said to be a noted buyer, gave sugar futures a slight boost at the start, floor brokers said.

Destination pricing and trade sales capped the mini-advance in the market, they said.

"We're just stuck in a range, waiting for the options to go off tomorrow," another broker said.

Sugar did not stray too far as it stayed in a narrow band for the entire session.

"People were trying to keep March close to the 5.50 (cents) strikes," one dealer said. "That was the only feature we got today."

The market also saw good rolling as funds moved positions to the May contract from front March, which is scheduled to go off the board on February 28.

Open interest in March as of Feb. 9 fell 3,176 to 63,490 lots while open interest in May went up 914 to 69,258 lots.

Fundamentally, the International Sugar Organisation (ISO) said the world sugar surplus in 1999/2000 (Oct/Sept) is likely to be revised down to 3.5 million tonnes from 4.76 million tonnes in the first estimate last November.

This follows a 5.8 million tonne surplus in 1998/99 and is the fifth successive year of oversupply in sugar.

"Thus, no quick fix is expected till the end of the (production) cycle in September 2000," ISO said in a monthly report made available Thursday.

On a technical basis, March retained support at the session low and 20-day moving average of 5.48 cents. Below that, the 5.20 cents mark lurks.

Resistance would be at 5.60 cents and then the 50-day moving average of 5.73 cents.

Estimated volume traded in the CSCE sugar market reached 25,011 lots from the previous estimated total of 20,988 lots.

Call volume touched an estimated 1,577 lots while put volume reached around 1,330 lots.

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