London December sugar futures closed down $4.00 at $234.00 on Friday on book-squaring before the contract ends on Monday and traders expected deliveries of up to four cargoes against the expiry. March settled down $2.30 at $247.00 in light volume of 1,945 lots, having traded in a $249.50-245.00 range. "We saw some producer buy-backs today of the December-March. Some producers were short and don't want to take delivery at the expiry of December on Monday," one trader said.
Another trader said, "People are getting out of December and buying March. We have seen some AAs (Against Actuals, a form of hedging), and some producer buybacks."
The session was dominated by book-squaring as the December contract wound up, and European traders anticipated deliveries of up to four cargoes of Brazilian sugar against the expiry.
The International Sugar Organisation (ISO) on Friday predicted sugar demand would outpace output in 2004/05, scaling back its deficit forecast by around one million tonnes to 1.8 million.
Earlier in the day, London-based sugar merchant Czarnikow revised its forecast for the global sugar deficit slightly lower to 4.78 million tonnes from 4.85 million previously.
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