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CSCE sugar ends up, March nears overhead gap

NEW YORK: CSCE sugar futures posted small gains at the close Thursday due to modest speculative and trade buying as key March moved into position to challenge an overhead chart gap in the next few sessions.

March SBHO ended up 0.07 cent at 5.56 cents a lb, in the upper half of its 5.60-5.45 range. Second-position May SBKO gained the same to end at 5.75 cents. The rest rose 0.06 cent.

The market extended its recovery after its recent steep sell-off which pushed sugar down to seven-month lows, traders said.

"All you could attribute this to is (the continuation of) a technical bounce," one said.

Sugar gapped lower as expected, with March managing to hold support at the 5.45 cents mark, floor sources said.

The market then came back on modest trade and a dash of speculative interest but got capped by producer pricing from Thai and Brazilian origins at the top of the trading range, they said.

"It was really a mix of trade and speculative fund buying. There's pretty good resistance at the top from origins," a physical broker for a New York-based trading house said.

After sugar retreated from its session highs, the market traded quietly for the rest of the session.

"It was as quiet as can be," a broker said.

March sugar appears set to fill an overhead gap between 5.62 and 5.65 cents.

"I think the market has the capacity to move through the gap, but there is a lot of origin pricing waiting in there," a dealer said.

"The Thais are still unsold and the Brazilians will likely do some stuff if we go through there," another broker said.

That overhead gap represents resistance for the market whilst support should be found in March sugar at around 5.40, 5.20 and all the way down to the psychologically vital 5.00 cents level.

There were only small bits of activity in the physical market. Syria bought 13,000 tonnes of whites at $201.15 a tonne C&F for March shipments. The trade was awaiting news regarding Iran's tender for 40,000 tonnes of raws and 14,000 tonnes of whites, likewise for March shipment.

Estimated volume reached 22,228 lots against yesterday's estimated total of 18,784 contracts.

Call option turnover was estimated at 3,304 lots against the previous estimated total of 6,453 and puts were forecast at 1,343 from an estimated at 4,563 lots.

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