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New York--July 17--CSCE Oct world sugar settled up 46 points at
9.66 cents per pound in a rally to new contract and two-year highs,
spurred by a positive commitments report. Funds and trade houses
bought, while producer selling was limited. The market has been
rising since March on forecasts that the world surplus will start to
shrink in 2000-01. Today's rally in coffee also helped.
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Oct gapped up sharply as it opened 18 to 25 points higher. Funds
and trade houses bought, and the contract surged 35 points to a new
high of 9.55c in early action. Commercials did some selling, and
locals took profits. Oct slipped, but held 9.40c.
After that, waves of buying from funds and the trade pushed Oct
to 9.63c at late morning. Prices climbed 49 points to a fresh high
of 9.69c in final action.
"The higher opening was because of the positive commitments
report and also because coffee prices rallied on frost in
Brazil," a floor broker said.
"It was mixed buying from the trade, funds and commission
houses today, with a lack of selling from producers," a desk
trader said. "The switches were moderately active."
The Oct/Mar spread worked at Oct 13 to 19 points over, and
settled at Oct 17 points over, after settling at Oct 14 points over
on Friday. A total of 70 against actuals were posted in Oct today.
"The market looks very good, and Oct will probably
test 10.00c at some point," the floor broker said. "The
trade is short 49,000 lots according to the commitments, and will
have to do more covering as the market rises."
Brazil's center-south cane harvest, which was one-third complete
by early July, is expected to be 20% to 25% smaller than last year's
bumper crop of 264 million tonnes. The nation's north-northeast crop
will be larger than last year, however.
Because of smaller 2000-01 crops in Brazil, Australia and other
top producing nations, the world sugar glut is expected to decline a
bit.
In physical activity, Syria tenders for a cargo of raws and a
cargo of whites on Wednesday. Syria, Iraq and Iran all bought
foreign sugar last week. Egypt needs to buy this fall, if not
sooner, traders said.
Pakistan has cut duties on sugar to 25% to 10% to facilitate
imports. The nation needs around 400,000 tonnes to meet demand
through November, and private companies have opened letters of
credit for 200,000 tonnes.
The Philippines didn't buy in Monday's tender for 100,000 tonnes,
citing rising prices and an unfavorable exchange rate. Officials
will re-tender on July 24.
Friday's commitments of traders report was bullishly construed
because it showed funds had room to rebuild longs. Funds and small
speculators were net long 49,064 lots as of Tuesday, down from
56,739 lots two weeks earlier, according to the Commodity Futures
Trading Commission. Long liquidation by funds when the Jly contract
expired in late June explained the decline.
A total of 14,250 tonnes was delivered against the LIFFE Aug
white contract, which expired Friday.
Oct open interest fell 562 lots to 94,852 lots Friday, while Mar
interest grew 1,099 lots to 46,301 lots. Total interest expanded 826
lots to 172,743 lots.
Chart support for Oct lies at 9.50c, today's gap at 9.38c to
9.31c, 9.25c, 9.18c to 9.15c, 9.10c, and 9.00c to 8.98c. Resistance
is found at 9.70c, 9.75c, 9.80c and 9.85c.
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