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CSCE sugar ends up in fund, local buying rally

NEW YORK: CSCE sugar futures rose back from three-week lows to settle higher Friday with local shortcovering and some fund buying just a few minutes before the close, traders said.

"We held, and shopped around and going into the close and we rallied on local shortcovering and a bit of fund buying," one trader said.

March sugar gained 0.07 cent to close at 5.84 cents per lb, trading between a high of 5.88 cents and a low of 5.69 cents. May gained 0.06 cent to end at 6.06 cents. Back months ended 0.03 to 0.17 cent firmer.

Although sugar prices fell to three-week lows in early morning trade with fund and local selling, it closed higher pushed by local and speculative buying. "Everybody is trying to make it break out of the recent range and they are failing," traders said.

"Nothing has changed for such a long time that is crazy to talk about it day to day like something new," a floor dealer said.

Technicians said resistance in March sugar should be at 5.92 and then 5.98 cents. Support was seen at 5.69-5.62 cents.

Estimated final volume reached 15,048 lots compared to Thursday's official 16,641 lots. Call volume touched 4,497 lots while put volume was estimated at 2,742 lots.

London's white sugar futures tested nearby chart support during late LIFFE Friday trading, but staved off followthrough declines to end mixed. Key March closed up 30 cents from the previous day at $173.10.

In physical business, traders reported on Friday that Iraq might have purchased more white sugar following its recent tender under the seventh phase of the UN oil-for-food programme.

Another trader cautioned that there was still no firm news but the picture could become clearer early next week.

Last week traders said Iraq might have bought between 50,000 and 100,000 tonnes of white sugar from little known Russian and Egyptian traders. An Italian seller was also rumoured.

Thai millers said on Friday China is likely to import more than 80,000 tonnes of raw Thai sugar this year to overcome a domestic shortfall caused by recent frost damage to its southern cane crop.

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