SUGAR PRICE SOURS, COFFEE PERKS UP ON STOCK DECLINE

SUGAR PRICE SOURS, COFFEE PERKS UP ON STOCK DECLINE

World sugar futures traded on the Coffee, Sugar & Cocoa Exchange here plummeted on heavy commission house selling and technical considerations, while the exchange's coffee futures market surged ahead on Friday's green coffee stock decline.

Sugar prices dropped by as much as 32 points, or 0.03 cents a pound, at 10.31 cents in response to a bearishly construed commitments of traders' report, issued after the close of Friday's session.Lacking other fundamental news, said dealers, the market reacted more sharply than usual to the Commodity Futures Trading Commission's report on the number of long and short positions held by traders.

The report is important, dealers said, because it can foretell greater volatility in the market. The market generally is more active when the number of long positions (contracts bought in anticipation of higher prices) increase.

The report showed long positions held by small speculators and hedgers at

49,825 contracts, up 1,700.

Commenting on Monday's decline, Judith Ganes, an analyst for Merrill Lynch, said the commitments report, "in the absence of any other news," apparently touched off some orders to sell.

Traders said selling came primarily from commission houses, with the trade doing most of the buying.

Coffee prices were up 2.85 cents in late Monday afternoon trading at 77.95 cents a pound.

A 511,000-bag drop in the Green Coffee Association's warehouse stocks prompted trade and speculator buying Monday.

Traders said the stock decline lends psychological support to the export retention plan.

Cocoa futures edged lower amid speculative selling. The December contract was off $9 a metric ton at $1,124 late in the day, after falling as low as $1,121.

Traders said some of the pressure may have come from Friday's commitments of traders report, which showed a somewhat larger-than-expected speculative long position.

Long positions by small speculators and hedgers were at 18,251 contracts, up 271. However, one trader said the increase wasn't significant enough to give the market real direction.

"This one is in the middle, more or less," the trader said. "It's not really good for a whole lot. It's kind of choppy, so that tells you it's kind of looking for direction."

Selling came from commission houses, dealers said.