RPT-SOFTS-Sugar mixed as deliveries in March eyed

Sugar futures were mixed Friday after scaling a five-month top as the trade turned its attention to how much sugar will be delivered as the spot March raw sugar contract expired in New York, brokers said.

Cocoa jumped on late short-covering but coffee retreated, with some knock-on sales inspired by disappointing U.S. GDP data.

Analysts said sugar has enough momentum to move higher.
"We might be able to test the 14 cents area," said Steve Platt, analyst for Archer Financial Services in Chicago, alluding to the May raw sugar contract, now the benchmark.

Purchases by India, expected to range from 1.0 to 4.5 million tonnes this year, are seen boosting sugar values.

Platt said that if the May contract stalls, a retreat toward 13.30, 13 and even 12.75 cents may be in the cards.

Larry Young, an analyst for brokerage Infinity Futures in Chicago, added sugar should continue "making its ascent" since the Friday pullback has been neither extensive nor sustained.

Cash brokers said deliveries against the tape upon expiration of the March raw sugar contract should range from 2,000 to 6,000 lots, with the spread between March and May dictating the final figure.

Open interest in the March contract stood at 10,579 lots as of Feb. 26, down 7,891 lots from the previous session.

New York's May raw sugar contract declined 0.17 cent to close at 13.73 cents per lb. On Thursday, the contract ended at 13.90 cents in the highest finish for the second position in sugar in almost five months.

The May white sugar futures in London increased $1.40 to finish at $401 a tonne.

COCOA SURGES LATE, COFFEE SLUMPS

Cocoa futures moved up given the stronger market in London, although the weak pound and grim economic conditions weighed on values for much of the session.

London-based dealers talked of industry buying, but some pointed to signals that demand in Eastern Europe and Asia had fallen sharply.

London's May cocoa contract rose 18 pounds to close at 1,803 pounds a tonne. New York's May cocoa contract added $9 to end at $2,413 a tonne.

Coffee futures were pressured by long liquidation while economic gloom contributed to negative sentiment in bean values.

The market digested a report that Vietnam, the No. 2 producer in the world, could harvest less than 16 million bags in 2009/10 after good crops the last two seasons.

New York's May arabica coffee contract fell 1.25 cents to finish at $1.119 per lb while May robusta futures in London lost $13 to end at $1,559 a tonne, having hit a fresh lifetime low of $1,535.

SOURCE:FORBES