CSCE raw sugar futures closed higher on Wednesday on speculative buying and switch business as players moved positions away from spot May before it expires at the end of the month, dealers said.
CSCE may sugar added 0.10 cent to finish at 6.71 cents a lb., moving from 6.48 to 6.73 cents. July rose 0.02 to 6.97 cents. Except for one contract, the rest ranged from 0.02 cent firmer to 0.07 cent easier.
"We had a lot of spread action and some spec buying got May up right on the close," a senior trading house broker said. "We'll probably see more of the same tomorrow."
Open interest in May tumbled 10,719 lots to 77,154 lots as of April 13 while interest in July rose 7,582 to 102,657 lots.
The switch trade will dominate the sugar pit as players get out of May before the contract expires on April 30.
Downturn to the day's lows was wiped out when trade buying propped up the sweetener and then speculative buying of the May/July spread kept the market well supported going into the conclusion of trade, dealers said.
Analysts said the market's fundamentals will likely reassert themselves once May expires, and they noted that second position July is already showing some strength by staying near the psychological 7.00 cents mark.
Expected falls in output in key producers like Thailand and India and belief that demand will outpace consumption in 2004/05 is seen giving a boost to sweetener values, they said.
Technicians said resistance in May was at 6.80 cents, then 7.00 cents. Support was at 6.49 cents, then the 5.95 to 6.05 cents region.
Final traded volume hit 68,713 lots, from the prior tally of 58,632 lots. Call volume reached 6,267 lots while puts stood at 2,565 lots. Open interest in the No. 11 sugar market fell 1,787 lots to 272,493 lots as of April 13.
US domestic sugar futures ended mixed on Wednesday.
July sugar rose 0.03 to 20.80 cents a lb. while September was flat at 21.01 cents. Except for two contracts, the rest shed 0.02 to 0.06 cent. Final estimated volume touched 368 lots, from 50 lots previously.
The CSCE is a subsidiary of the New York Board of Trade.
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