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MORNING SUGAR REPORT

Wednesday February 12, 2020

WORLD SUGAR #11

World sugar futures have exploded on nearby spread, led by London as the sugar available against the March contract becomes highly sought. March is last 32 higher at 15.75, trading from 15.34 to 15.90 to this point. May has traded from 14.98 up to 15.29 and is last 11 higher at 15.15. More than 190,000 lots have traded between March and May to this point. On spread, the March/May has traded from 36 over to 63 over and last at 59 points premium. The May/July has traded from 12 over to 22 over and last at 18 over.
SUGAR #11 OPEN INTEREST:
 H0: 281,325 -35,452 (210,321 last yr.)  K0: 368,748 +29,248  N0: 242,060 +8,091  V0: 177,357 +3,327

TOTAL: 1,251,740 +7,534
 RECORD OPEN INTEREST  OI Last Year: 927,409 (+16.1 million tonnes lower)  JSG Spec Live Call: +180,500 long  Prices last year: 12.90
SUGAR #11 OPTION WATCH

ATM VOLS: h 15.50 strad 39-41 vol 25.75 +.50% j 15.00 strad 94-95 vol 26.15 +.65% k 15.00 strad 129-132 vol 26.15 +.45% n 15.00 strad 157-161 vol 22.88 +.10% v 15.00 strad 187-191 vol 20.65 unch Trades of note: 1,300 h 15.50 calls blocked 20-21 500 h 15.50/15.75 cs vs 15.25p trades flat 500 h 15.50c vs 15.49 trades 19
MACRO BYTE
A deep slump in euro-area industrial output at the end of last year highlights the scale of the challenge the sector will face in 2020. The 2.10% drop, which is the steepest in almost four-years, will raise doubts about a meaningful rebound in momentum. The economy barely expanded in the fourth quarter and the outlook at the start of the year has been dented by the coronavirus.
Falling mortgage rates are spurring a surge in U.S. homeowners seeking to refinance their loans to lock in lower payments. A gauge of mortgage refinancing volume rose 5.0% last week to the highest level since June 2013, according to a Mortgage Bankers Association report released today.

















500 h 15.50/16.00 cs vs 15.50 trades 16 300 h 14.75/15.50 cs vs 15.51 trades 57
LONDON #5

In London, March, which expires Friday, is last $16.20 higher at $453.40 trading from $438.60 to $454.30 to this point. On spread the March/May is last $5.60 higher at $20.20 premium. The March/March white premium is last at $105.00, up $8.00 on the day.
GLOBAL FUNDAMENTALS
Cash-wise: More from Dubai: ED&F Man Holdings increased its projection for the global deficit by 10% to 7.7 million metric tonnes, similar to the 7.0 million metric tonnes expected by Commerzbank and 7.0-8.0 million metric tonnes by LMC International. The global head of sugar at Louis Dreyfus suggested that the market had been underestimating the impact of the low cane prices in Thailand, while the head of sugar analytics at S&P Global Platts said the unexpected fall in output was the main reason why world sugar prices were able to increase despite the negative macro environment. Mills in Thailand have been crushing 1.04 million mt/day of cane since reaching peak production pace on January 16, down from 1.17 million mt/day in the same period of 2018/19, despite the opening of two new mills. Sugar output as of February 5th reached 6.37 million mt and APIC expects total output for the year at 10.2 million mt, with a variation of 500,000mt.

Russia produced 7.5 million mt of sugar as of February 11th, with 10 plants still producing, according to Soyuzrossahar. Taking into account sugar from molasses and syrup, total output should reach 7.7 million mt this year, the union said.

Beet planted area across Europe is likely to fall again this spring and the first confirmation came from the French Sugar Beet Growers Association (CGB), which expects a yearly drop of 8% in domestic acreage. This would represent the second consecutive sharp fall in beet acreage in France after it was reduced by 7% last year to 451,000 hectares. Platts anticipates a similar scenario in the other main beet producing countries such as Germany and the UK, which would take total EU-28 beet acreage in 2020 to 1.647 million hectares, down 1.4% from the previous year.


GLOBAL CURRENCY UPDATE  USD: 98.827 -0.14%  BRL: 4.3136 -0.56%  INR: 71.282 +0.02%  MXN: 18.665 -0.10%


Best Regards,

Jeff Dobrydney Senior Vice President Head of Futures & Options JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. 203.853.3000 www.jsgcom.com

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.

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