MORNING SUGAR REPORT

Thursday February 13, 2020

WORLD SUGAR #11

World sugar futures have reversed course today on the last day of the index fund roll, led by profit taking on nearby spreads in both London and New York. March is last 30 lower at 15.49, trading from 15.84 to 15.44 to this point. May has traded from 15.17 down to 14.91 and is last 13 lower at 14.93. More than 70,000 lots have traded between March and May to this point. On spread, the March/May has traded from 72 over to 56 over and last at 56 points premium. The May/July has traded from 18 over to 15 over and last at 16 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 straddle 40-42 vol 30.40 j 15.00 straddle 95-98 vol 27.50 -.50% k 15.00 straddle 130-132 vol 26.60 -.40% n 14.75 straddle 156-160 vol 23.20 -.35% v 14.75 straddle 185-189 vol 20.80 -.20% Trades of note: 2,000 h 16.00 calls live trade 5-9 1,200 j 14.50 calls live trade 72 897 j 15.00/ m 13.75 fences trades 27
MACRO BYTE
Global oil demand will drop this quarter for the first time in over a decade as the coronavirus batters China’s economy, the International Energy Agency said. The new estimates show that oil markets face a significant surplus despite the latest production cuts by OPEC and its partners. Crude already sank to a one-year low below $50 a barrel last week and the impact of the epidemic will be felt throughout the year, the agency said.


















LONDON #5

In London, March, which expires tomorrow, is last $16.40 lower at $433.10 trading from $456.60 to $430.20 to this point. On spread the March/May is last $12.40 lower at $9.00 premium. The March/March white premium is last at $92.00, down $12.00 on the day.
GLOBAL FUNDAMENTALS
Cash-wise: According to Williams SA the Brazilian vessel line-up of raw sugar waiting to load is now 628,006 tonnes of sugar, which higher on the week. This compares with 405,941 tonnes last week and 366,918 tonnes last year. Approximately 175,000 tonnes of sugar shipped on the week. Please see our attached chart.

Here are the new named nominations:
CHINA 59,000 SANTOS COPERSUCAR ALVEAN
ALGERIA 45,000 SANTOS COPERSUCAR CARGILL
NIGERIA 44,000 SANTOS COPERSUCAR NOM UK
BANGLADESH 22,250 SANTOS RUMO LEXDEN
SAUDI ARABIA 20,000 SANTOS TIPLAM DREYFUS
MOROCCO 31,000 SANTOS TIPLAM SUCDEN
TOTAL: 626,006








The total volume of Indian sugar exported to date is around 3.2 million tonnes and are forecasted to total between 4.5-5.0 million tonnes by the end of the season (Sep. 30).

Mexican sugar production in the week ended February 8th was7 2,598 tonnes lower than production in the same week last year – through 19 weeks the crop is now 541,338 tonnes lower than last year at 1.820 million tonnes. The narrative remains the same: area harvested was just 1.4 % lower than last year during the week, yet the cane crush was 20.27 % lower and sugar production is 26.52 % lower as both ag yields and industrial yields remain well below last year. Mexican sugar exports have picked up – exports to the US for consumption through February 2nd have totaled 163,389 tonnes, up 66,908 tonnes on the week. A further 11,478 tonnes shipped under Mexico’s IMMEX program, bringing the total for the cycle to 83,897 tonnes.


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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Frank Jenkins
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