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CSCE sugar closes mixed, trade buys up back months

NEW YORK: CSCE sugar futures ended mixed on Thursday in a session whose main feature were spreads although some light trade buying gave back months a boost.

"We had a lot of spreads and a lot of buying by the trade in the back months," a senior broker for a New York-based trading house said.

Key May sugar shed 0.04 to close at 5.20 cents a lb, trading in another seven-point range from 5.23-5.16 cents.

Spot on March lost 0.03 to 5.12, trading 5.15-5.09 cents, the same trading range it had in the previous session.

July came off 0.02 to 5.49 cents.

Back months rose between 0.03-0.19 cent.

Sugar gapped to its low for the day at the start of business and then came back on some scale-down buying of differentials, brokers said.

"It was all spreads, except for some flat out light trade purchases in the back months," a physical broker said.

Floor dealers said with spreads the only game in town, most players were just waiting for expiration of front March on February 28 before doing anything else in sugar futures.

"It's not been a great liquidation because it's not been as busy as we thought it would be," one said.

Open interest in March as of February 23 plunged 6,527 to 28,474 lots while May's open interest soared 3,372 to 96,564 lots.

No talk has emerged yet regarding how much sugar would be delivered against the tape in New York although trade houses Cargill and ED & F Man were again expected to be the main players when March expires.

On a technical basis, market participants said they believe the May sugar contract still faces resistance at 5.30 and in layers to the overhead gap at 5.62-5.65 cents.

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

Estimated volume traded in the CSCE sugar market reached 41,274 lots, from the previous estimated volume of 30,998 lots. About 4,500-5,000 of the total would likely be in AAs, traders said.

Call volume reached an estimated 5,715 lots while put volume was forecast at 1,449 lots.

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