20000106

CSCE sugar ends in slump on fund, local selling

NEW YORK: CSCE sugar futures closed at a 19-day low on Tuesday amid strong fund and local selling while the trade was supportive. Market activity had not fully recovered from the long New Year's holiday.

"There wasn't a fresh fundamental feature," said Judith Ganes, softs analyst at Merrill Lynch.

March sugar fell 0.33 cent to close at 5.77 cents per lb, the lowest since a close of 5.75 cents on December 16 and 0.01 cent shy of its intra day low of 5.76 cents. It traded from a high of 6.11 cents.

May SBK0 dropped 0.25 cent to end 0.01 above its low of 5.98 cents. July lost 0.21 cent to close at 6.13 cents a lb. Back months lost 0.17 cent each.

Dealers said the market had been looking to find a bottom through local selling while support came from trade buying.

Many players were still on the sidelines, especially with the London whites market just reopening Tuesday, a day after New York raws, from a long 2000 millennium weekend, dealers said. Technicians said resistance in March sugar should be at 5.92 and then 5.98 cents. Support should be seen at 5.75 cents and then 5.65 cents.

"It was all technical selling today. The market looks weak,' said Scott Meyers, analyst at Pioneer Futures Inc.

"During the next couple of sessions we should work our way down to the 5.65 - 5.66 cent level," he predicted. "Any break below the 5.52 level would be very embarrassing to the charts."

Estimated final volume reached 23,575 lots compared to Monday's official 12,831. Call volume touched 3,113 lots while put volume was estimated at 2,184 lots. In physical business, about 15 percent of the British sugar beet crop is still unharvested due to low world prices, an industry official said Tuesday. Farmers will probably leave the crop in the ground until the end of February, when the sugar beet campaign normally ends. In China, a week of frost in the south of the country in late December seriously damaged sugarcane crops in Guangxi-which produces one third of China's sugar-and in two other provinces, the China Economic Times quoted a local government official as saying. Guangxi's sugarcane output is expected to fall by more than two million tonnes. In the 1999/2000 crushing season sugarcane was seen falling by 800,000 tonnes from the previous season, it said. Separately, the Pakistani government may allow the export of at least 100,000 tonnes of sugar out of a projected surplus of 200,000 tonnes, a sugar industry official said Tuesday. The nine-day relative strength index (RSI) of March CSCE sugar stood at 28 at the close Tuesday, compared with 69 on Monday.

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