NEW YORK, March 2: CSCE sugar futures surged to a strong finish Friday on fresh speculative buying, with a more friendly outlook seen giving May a further boost going into next week.

Sugar’s looking a whole lot better, a floor broker said. We have fresh speculative buying coming into the market.

He added that the prospect of Russian pricing, possible Chinese tolling, anxiety about rains in Brazil affecting the harvesting of the massive cane crop there, and speculative accounts who may want to reverse their positions could prompt a stronger performance in sugar values.

CSCE May sugar jumped 0.28 cent, a gain of 4.92 per cent on the day, to close at 5.97 cents a lb, just a hair below the session peak of 6.01 cents. The intra-day low was at 5.74 cents.

July increased 0.25 cent to finish at 5.37 cents.

The rest shot up 0.21-0.32 cent.

Futures popped higher at the onset of business after sugar finally shook off the bearish shackles of the March contract, which expired on Thursday, floor sources said.

An initial flurry of trade buying in turn attracted speculative buying into the market.

It just took off from there, a dealer said.

Market operators said they will now turn their focus to the May/July spread and what impact the rains in Brazil’s key center-south cane area will have on the amount of sugar available against the May contract in New York.

Traders are still casting a wary eye on the record Brazilian 2002/03 cane harvest which has been estimated to reach from 270-280 million tons, from 244 million tons produced last season.

Technically, analysts said they believe support in the May raw sugar contract is at 5.48 cents and then at the trendline mark of 5.24 cents. Resistance in the contract should be at 6.00 cents.

Open interest in the number 11 sugar contract plunged 4,954 lots to 198,960 lots as of Feb. 28.

Estimated final volume stood at 32,763 lots against the previous 38,230 lots. Call volume touched 5,725 lots while puts hit 3,068 lots.

The weekly CFTC commitment of traders’ data showed the funds and small speculators with a net short position of 27,419 lots as of Tuesday, Feb. 26.

It (the number) is meaningless. The market is breaking out to the topside, one investment house dealer said.

US domestic sugar futures finished mostly lower Friday.

May lost 0.07 cent to end at 20.27 cents a lb while July shed 0.09 cent to 20.40 cents. The back months ranged from 0.20 cent higher to 0.15 cent softer.—Reuters