Jenkins Sugar Group Evening Report                                         

Thursday July 29, 2010

The stars aligned today, providing the sugar market with a ripe environment to extend its recent gains. The dollar sagged today, particularly against the euro, and the CRB index posted a 1.3 % gain in rallying to a 12 week high, so sugar met little in the way of headwinds as it moved to a new recent high at 19.67. October once again outclassed the balance of the board – prices settled 63 higher in October at 19.50 and from 20 higher in March to 10 lower in red March. Volume was 105,927 lots, over 17 % (18,173 lots) of which traded in the October-based spreads. October/March widened dramatically (again), trading from 63 to 102 over and last at 95 over. March/May was strong as well, trading from 75 to 94 over and last at 90 over. Technically, October has gained over two cents since bottoming at 17.52 one week ago, and the RSI is now 73.438 % - the highest reading thus far in 2010, but not alarming by any means. Technically, October dropped 910 points from its 22.78 contract high to the 13.67 low posted on May 9^th, and 19.74 represents a two-thirds retracement of the decline. On the daily chart, there is a reasonable band of congestion ranging from 19.50 to 21.50. On the continuation chart, 21.70 represents a 50 % retracement of the decline from the 30.40 high to the 13.00 low seen on May 9^th. There is meaningful congestion starting at 21.00, but there is little other resistance immediately overhead.

The Brazilian sugar lineup increased 150,586 tonnes to 3.550 million, up from 1.343 million this time last year. Currently the center south appears set to ship at least two million tonnes of raws in July, but delays may cause sugar destined for Ramadan celebrations to be tardy. The number of vessel waiting to load is now 123, up from 113 a week ago. Al Khaleej has reported that sugar may be in short supply during Ramadan and that high prices have led to low stocks as the buying season began. They also noted their refinery is at full capacity due to the white premium. India’s monsoon was 38 % above normal last week, and is now just five percent below normal for the season. The government has issued a 1.7-million tonne open market quota, up from 1.45 million tonnes in July.  

In the NAFTA region: US futures prices settled 24 higher in September and from six lower in November to 13 lower in March. The day’s volume was spread between the September (mainly at 36.00) and the Q2 and Q3 2011 positions (all at 28.90). September open interest dropped by 189 lots on Wednesday’s AA’s and trading. OI is now 1,906 lots. The beet crop in Michigan appears poised to set a new record, with an early start to the crop complemented by near-ideal conditions. The harvest is expected to start on September 1^st, two weeks ahead of last year. Michigan is expected to yield 29 tonnes per acre, up from 24.6 tons/acre last year and 28.9 tons in 2008.

Regards,

Jenkins Sugar Group, Inc.

(203) 563 6100

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This report has been compiled for general informational purposes only.  While every effort has been made to ensure accuracy, Jenkins Sugar Group, Inc. assumes no responsibility for errors and omissions.