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CSCE sugar ends down, nears fresh lifetime lows

NEW YORK: CSCE sugar futures finished sharply lower Monday on a wave of all-around sales as nearby months stumbled to within striking distance of fresh lifetime lows, which they may likely breach in the coming sessions.

"It was a bad day for sugar," said Patrick Funaro, sugar specialist with the Brazil desk of FIMAT Futures in New York, said. "Technically, it looks awful."

Spot March sugar sank 0.28 cent to end at the session low of 5.21 cents a lb. The intra-day high was 5.45 cents. It settled at a level just above the recent low of the previous two months of 5.20 cents, a mark that had constituted a key level of support for March sugar. The contract is now just a few points above its contract low of 5.06 cents.

Benchmark May slid 0.27 to 5.40 cents, trading 5.62 to 5.38 cents, which is just above its lifetime nadir of 5.26. The rest were down 0.23-0.11 cent at the close.

Brokers said a combination of the poor technical close on Friday, news that funds and small speculators in the CFTC commitment of traders data were net short by only 11,624 lots, and weak London whites pressured New York raws from the start.

"They finally broke it down and we hit stops in both March and May," a floor dealer said.

Said Funaro, "We hit a lot of stops below 5.40 in March and 5.55-5.57 in May. The market just collapsed."

Physical brokers said option-related selling added to market pressure while origins were said to have lowered their sales target to below 5.50 cents in front March.

A modicum of support came into the market and helped March stabilise briefly at 5.29, but another burst of sales near the close tried to take the contract below 5.20 cents, dealers said.

"I won't be surprised to see the market test 5.15 (cents in March) just to see if we can generate more selling," Funaro said, adding no one is jumping into the buy side in physical dealings. "I think we're going to test 5.00 cents and see what's going on."

Traders put support in March initially be at 5.20 and then all the way down to 5.00 cents. Support in May should be at the contract low of 5.26 cents. They pegged resistance in March at the overhead gap of 5.45-5.49 cents while May should find resistance at a gap of 5.62-5.65 cents.

Estimated volume traded in the CSCE sugar market reached 37,005 lots from the previous estimated total of 14,682 lots.

Call volume touched an estimated 5,143 lots while put volume reached around 2,279 lots.-Reuters