UPDATE 2-CSC Sugar makes rare exchange buy in small July ICE delivery
(Rewrites throughout with market details and background)
By Chris Prentice
NEW YORK, July 1 (Reuters) - CSC Sugar LLC and a Louis Dreyfus Commodities unit have bought the smallest July delivery of raw sugar against the world raw sugar futures contract in 15 years, in a purchase seen as a buying opportunity because of a sharp price discount.
The origins include Honduras, El Salvador, and Nicaragua, the exchange data showed, and the total delivery against the July contract that expired on Monday, confirming traders' expectations from Monday after the market close.
The purchase was worth about $14.2 million, based on the contract's closing price.
Exchange data showed Louis Dreyfus unit Term Commodities bought 492 lots. A spokeswoman for the company declined to comment on the transaction.
A trader with CSC Sugar confirmed to Reuters that the Connecticut-based firm was the buyer of the remaining 269 lots. It was the first time the Connecticut firm has sourced sugar from the exchange in about seven years, the trader said.
A sharp spike in the spread in the final days ahead of the July contract's expiry was seen as evidence of weak demand for the sugar, though the large discount may have been spied as a buying opportunity for the two firms.
The move stoked speculation about the possibility of tightening U.S. supplies as the North American market reels from uncertainty because of a trade dispute over Mexican supplies, though dealers say they do not expect a short-term supply crunch. Continuación...