NEW YORK, Feb 15: CSCE raw sugar futures closed higher Friday on buying by the trade and small speculators as the market broke a three-day losing streak ahead of a holiday weekend.

CSCE March sugar rose 0.21 cent to finish at 8.86 cents a lb, trading from 8.55-8.90 cents. May gained 0.17 to 8.48 cents. The rest rose 0.02-0.10 cent.

Mike McDougall, senior vice president for FIMAT USA Inc., said trade accounts were the “best buyers” during the session and speculators looking at a long holiday weekend were forced to cover late in the session.

That kind of snowballed, he said in alluding to the late buying spree which hit futures. The trade was the best buyer for the day.

Analysts said some of the buying may be tied to the holiday weekend. The New York raw sugar market will be shut Monday for Presidents Day. Trading resumes Tuesday.

Some dealers also fretted about a possible war between the US and Iraq, especially if shipping and insurance rates spike in waters leading to the Middle East, an increasingly major buyer of sugar, and Russia, the world’s top importer of the sweetener.

A senior floor dealer said the short-covering was also prompted by the market getting beaten down the past few sessions.

The market is a little bit oversold, he said.

As to spreads, open interest in March fell 3,746 lots to 92,464 lots as of Feb. 13 while interest in May rose 2,773 to 82,857 contracts.

Market fundamentals have not changed in any meaningful manner. A supply glut and excess production from several producers should push prices back, but the keen appetite of funds to expand long positions in sugar will likely boost values in the short term.

Technicians said resistance in the March contract is at 8.90 cents, the new contract peak of 9.04 cents and then 9.10 cents. Support is at 8.58 cents, with further scope for a probe of the 8.30/35 cent zone.

Estimated final volume hit 39,263 lots against the prior count of 39,731 lots. Call volume stood at 4,847 lots and puts touched 3,394 lots.

Open interest in the raw sugar market rose 720 to 276,690 lots as of Feb. 13.

Separately, the weekly CFTC commitments of traders report showed funds and small speculators with a net long futures position of 111,888 lots, slightly lower when compared with last week’s net long standing of 112,896 lots.

US domestic sugar futures closed mixed Friday.

May fell 0.05 to 21.90 cents a lb while July was again flat at 22.20 cents. Except for two contracts, back months closed steady.

Estimated final volume reached 203 lots, versus the prior tally of 645 lots.—Reuters