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CSCE sugar closes slightly lower

NEW YORK: CSCE sugar futures finished on Friday with only minor losses due to light fund sales in range-bound trade dominated by spread dealings as the market consolidated after sinking recently to an 8-1/2 month low.

"If you were not doing spreads, it was real slow day in sugar," a floor broker said. "There was no real direction to it except for spread activity."

Key May shed 0.05 to close at 5.17 cents a lb, trading 5.24-5.16 cents.

On Wednesday, March had crashed to a new lifetime low of 5.10 cents before closing at 5.11 cents, the lowest mark for benchmark sugar futures since June 1, 1999 when it settled at 5.00 cents.

Spot March sugar went out 0.04 weaker to 5.03 cents, moving from 5.10-5.03 cents. The rest were off 0.04-0.08 cent.

Dealers said sugar traded in lackluster fashion, especially since the market is closed Monday for Presidents Day. Business will resume Tuesday.

"The only thing we really saw today were funds rolling out of their nearby shorts. The price was practically stagnant," a physical broker for a trading house said.

Open interest in March as of February 17 declined 2,623 to 43,731 lots while open interest in May increased 2,426 to 88,665 lots.

"With a holiday coming up, would you want to do anything in this market," a dealer said.

The only physical business seen was news that Iraq is estimated to have concluded contracts for nearly 300,000 tonnes of whites under the seventh phase of the U.N. oil-for-food programme.

On a technical basis, traders said they feel May sugar would still need to fill an overhead gap marking resistance at 5.62-5.65 cents to generate follow-through buying.

Support in May would be at the new lifetime low of 5.10, 5.00 and then key support at 4.90 cents.

Estimated volume traded in the CSCE sugar market reached 30,781 lots, from the previous estimated volume of 24,361 lots. Dealers said volume was bloated by rolling and spreads since little, if any, outright business was done.

Call volume touched an estimated 1,881 lots while put volume reached around 821 lots.-Reuters