CSCE sugar falls on speculations

CSCE raw sugar futures ended slightly lower on Monday due to late sales by small speculators after rise stalled, and prices could grind lower in the days ahead, brokers said.
CSCE may sugar eased 0.01 cent to settle at 6.08 cents a lb, close to the bottom of its 6.06-6.23 cents trading band. In the preceding two sessions, the May contract sank a total of 1.06 cents or 14.82 percent in value.
On Wednesday, the contract ended at a 7-1/2 month peak of 7.15 cents. July shed 0.05 to 6.28 cents.
Except for one contract, the rest slipped 0.01 to 0.03 cent. "It's consolidation time," said Patrick Funaro, senior vice president of FIMAT USA Inc.
Sugar shrugged off an initial bout of weakness to charge higher on trade and speculative short covering, floor sources said. But the advance soon petered out and late speculative sales knocked the sweetener back on its heels.
Analysts said the soft close might lead to a probe of lower levels this week. "I think we're going to work a little lower and go to 6.00 (cents, basis May) or even 5.90," a floor broker said.
While the supply/demand balance seems brighter due to expected lower output in Thailand and India, a record crop in Brazil and high freight rates could keep sugar on the defensive in the weeks ahead, they said.
The Sao Paulo Cane Agroindustry Union (Unica) on Monday forecast Brazil's 2004/05 (May/April) center-south cane crop at a record 319.9 million tonnes, up from the previous record of 299.4 million in 2003/04.
Technicians said resistance in May futures now stands at 6.50 and 6.75 cents. Support would be at 6.00 and 5.90 cents. Final traded volume hit 62,530 lots, against the previous tally of 136,492 lots.
Call volume stood at 6,532 lots while puts hit 7,728 lots. Open interest in the No. 11 sugar market plunged 16,960 lots to 288,623 lots as of March 26.
US domestic sugar futures ended mostly higher on Monday. May sugar rose 0.03 to 20.93 cents a lb while July gained 0.02 to 20.95 cents.
Except for two contracts, the rest went up between 0.01 and 0.20 cent. Final estimated volume touched 487 lots, from 1,266 lots previously.
The CSCE is a subsidiary of the New York Board of Trade.