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CSCE sugar ends easier, fades on local selling

NEW YORK: CSCE sugar futures settled with small losses on Thursday due to sales by small speculators who bailed after an early upside probe fizzled as the market is seen staying pinned in a trading range.

May sugar ended a two-day winning streak by sliding 0.12 to finish at 4.96 cents a lb, near the bottom of its 4.94-5.13 cents trading range.

July lost 0.08 to 5.22 cents. The rest were 0.03 cent easier each. "You had a lot of local selling and they tried to run some stops near the close. Other than that, there was very little else going on," a broker for an investment house in New York said.

Sugar crept higher at the onset of business as speculative buying tried to get it past the peak in the previous session of 5.14 cents, floor dealers said.

But the market got capped by some origin sales and fund liquidation, they said.

Discouraged at sugar's inability to make much progress topside and coupled with the fact that buying sentiment seemingly petered out, funds and locals decided to lighten up.

"They tried to push the two front months lower. Trade support in the back months limited the losses though," a dealer said.

A floor broker said the market should eventually steady itself and work its way toward higher ground since the funds were believed to be holding a substantial short position.

"We should get a pop later on, but for now we're just content to sit here," he said.

Market players were also fretting that purchases by top importer Russia will probably be sharply lower this season.

Moscow has said it will set an extra 10 percent special import duty on sugar imports on top of the current five percent duty beginning in April.

The special duty will cease to be levied when a 45-percent seasonal tariff goes into effect from June 15 to December 15 in a move that will have to be endorsed by a government resolution.

With India having increased its own sugar import duties and China practically self-sufficient, the excessive supplies sloshing around the market will struggle to find homes.

"We may stay here over the short-term, but I would not rule out 4.00 cents later on," a trader said.

Chartists feel near-term support in May sugar should be at 4.90 and then the contract low of 4.84 cents. Resistance was currently pegged at 5.20 cents.

Estimated volume reached 21,978 lots, against the previous estimated volume of 18,663 lots. Call volume touched an estimated 3,874 lots while put volume hit an estimated 621 lots.

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