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CSCE sugar extends gains in slightly firmer finish

NEW YORK: CSCE sugar futures ended mostly higher on Wednesday, with nearby months getting a boost from trade buying of the spreads and light fund purchases in quiet dealings one day after expiry of the March contract.

May sugar went up 0.09 to settle at 5.08 cents a lb, trading 5.14-4.98 cents. July rose 0.06 to 5.30 cents.

The sole loser was March 2001, which came off 0.03 to 6.15 cents. Far forward October 2001 inched up 0.01 to 6.50 cents.

The rest settled unchanged.

"It was a very quiet affair," a physical broker for a New York-based investment house said.

Sugar headed north on trade-related spread action along with buying by locals and funds, floor sources said.

"There was a little bit of strength in the spreads and the funds jumped in also," another broker said.

Option and origin sales capped the market and trimmed some of its gains, dealers said. Sugar then spent the rest of the session stuck in neutral as it stayed in a narrow range.

Deliveries against the tape in New York at expiry of the March contract stood at 517 lots, the New York Board of Trade (NYBOT) said.

A total of 387 lots came from Nicaragua, 57 lots from Recife in Brazil and 73 lots from Guatemala, an NYBOT statement said.

Brokers said the small amount of deliveries and the apparent reluctance of origins to price their sugar immediately should give futures some support for the meantime.

"What producer is going to price the May right now? They've got time," a broker said.

For now, the sugar market should focus on the pace of physical offtake from top importer Russia which has been slow of late.

On a technical level, chartists said support in May sugar should be at the contract low of 4.84 and in layers down to 4.50 cents. Below that, 4.35-4.40 cents lurks and then the psychologically vital 4.00 cents mark.

Resistance was currently pegged at 5.20 cents.

Estimated volume reached 18,663 lots, against the previous estimated volume of 26,484 lots. Call volume touched an estimated 4,302 lots while put volume hit an estimated 2,061 lots.

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