CSCE raw sugar futures settled mixed on Friday as operators kept an eye on expiration of spot March and the amount of potential deliveries against the contract, brokers said.
March sugar inched up 0.01 cent to close at 6.03 cents a lb, moving from 5.95-6.10 cents. Key May shed 0.10 cent to settle at 6.12 cents, ranging between 6.07-6.25 cents.
The rest ranged from 0.06 cent down to up 0.02 cent.
Floor sources said the spread between the March and May sugar contracts, which had hovered the past few days at over 20 points, narrowed going into the close of business as trade accounts bought March and sold May.
"Some players felt the trade wanted to hold back on the amount of sugar to be delivered because they think the sugar could eventually be bought by China," a senior trading house broker said.
Initial estimates by brokers pegged the deliveries at 6,754 lots, with Man the biggest receiver with 4,386 lots. Cargill was the main deliverer with 5,688 lots.
Exchange data showed that open interest in March sank 8,344 lots to 11,382 lots as of February 25.
"I don't know if Man is doing it for a fund or for somebody else," another dealer said, adding the likely origin of the sugar would be Brazil and Central America.
Fundamentally, analysts said the market will likely grind higher on speculative short-covering over the short term now that expiration of March is out of the way.
They said high freight rates, another record cane crop in leading grower Brazil, and surplus stocks would keep prices capped over the longer haul.
"I think the producers are just waiting for May to fill the gap and then hammer it again," one explained.
Technicians said they feel resistance in May would be at the gap from 6.27-6.37 cents, with support at an area of 6.04/05 cents.
Final estimated volume reached 51,042 lots, from the prior tally of 56,893 lots.
Call volume was at 11,709 lots while puts stood at 7,506 lots. Open interest in the number 11 sugar market dropped 4,136 lots to 254,463 lots as of February 26.
Final estimated volume reached 1,497 lots, against the prior tally of 226 lots.
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