20000322

CSCE sugar closes softly on trade, local selling

NEW YORK: CSCE raw sugar futures finished near their lows Monday due to trade sales and local long liquidation in a quietly traded session.

May fell 0.14 cent to settle at 5.13 cents a lb, near the bottom of its 5.11-5.29 range. July lost 0.13 to 5.20 cents and October declined 0.06 to 5.66. The rest were 0.04 cent easier each, except for October 2001 which ended unchanged at 6.28 cents.

"There was origin and trade selling up above and some shortcovering by the locals near the close. The funds were not there because there was no reason for them to do any shortcovering," a veteran floor broker said.

As it had done in the past few sessions, sugar gapped higher at the start but subsequently failed to find topside momentum and came off, floor sources said.

Trade selling and local long liquidation took the market down before it found some support, they said.

"The overhead pricing, a mixed bag of selling and weaker spreads dragged us down," a physical trader said.

But the activity remained light and the tone decidedly featureless. A disruption caused by a computer glitch around midday had no impact on the market, dealers said.

Estimated volume was 17,509 lots, against the previous estimated volume of 12,024 lots. Call volume touched an estimated 2,358 lots while puts reached around 1,421 lots.

On a technical basis, dealers said short-term resistance in May was at the 40-day moving average at 5.34, the 50-day moving average at 5.43 and then 5.50 cents. They said support should be at the double bottom of 5.03, 5.00 cents, 4.90, the contract low of 4.84 cents and then 4.50 cents.

A senior Trade Ministry official in top importer Russia said Monday that Moscow will impose a quota on raw sugar imports of 3.5 million tonnes a year from 2001, with all sugar imported above this volume subject to a higher tariff.

Russia's Sugar Producers Union said last Friday raw sugar imports soared to 6.3 million tonnes in 1999 from 3.6 million in 1998.

In other news, industry sources in Shanghai said Monday that China will likely sell sugar from its huge reserves to meet a production shortfall following a crippling early winter frost in key sugar producing areas.

China would seek to limit imports, which some traders estimate will reach 500,000 tonnes this year, as much as it can. A combination of quota restrictions and a crackdown on smuggling should keep foreign sugar out, the sources said.

The Philippines' National Food Authority rejected tenders for the supply of 30,000 tonnes of refined sugar for June/July arrival.

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