Thursday February 13, 2020

World Sugar Futures recovered from initial pressure in massive volume but found late profit taking/spread selling in even greater volume to turn in a negative session. Spreads in both London (March expires tomorrow) and New York were once again extremely volatile. March closed 62 points to the downside at 15.16, while May finished the session 28 down at 14.78. The deferred positions closed 12 to 17 points lower. The final estimated volume totaled 418,563 and over the last two days the volume has totaled 961,018 contracts. Incredible. On spread, the March/May traded from 71 to 35 over and last at 38 points premium. Today was the last official day of the index fund roll on the March. The May/July spread traded from 20 to 11 over and last at 11 points premium.

Option watch: Option volume was 55,484 contracts consisting of 28,661 Calls and 26,823 Puts. Very interesting point on option open interest - put open interest increased by 20,000 contracts yesterday. The largest increase was the April 14.75 puts that traded between 29-32, close to 5,000 lots. Volatility showed some very early signs of life only to be pummeled by days’ end.

Trades of note:  2,000 March 16.00 Calls trade 5-9  800 May 16.25/ March 15.75 Diagonal Put spreads trade 12-17  2,000 April 14.75 puts trade 31-32  1,000 April 14.50 Calls trade 72  897 April 15.00/ June 13.75 Fences trade 27  1,500 May 15.00/16.00 Call spreads vs 15.02 trade 33  500 May 15.00/14.00 fences trade 26  1,000 July 11.50 Puts trade 4  800 July 15.50 Calls trade 56-57  500 July 16.00 Calls vs 14.87 trades 39  1,000 October21 13.00/ October20 14.00 Diagonal Put spreads trade 10-11  1,000 October 16.50/13.25 Fences vs 14.80 trades 11

ATM Vol’s:  March 15.25 straddle 38-40 vol 29.00  April 14.75 straddle 88-90 vol 25.65 -2.2%  May 14.75 Straddle 119-121 vol 24.75 -2.1%  July 14.75 straddle 150-152 vol 22.22 -1.4%  October 14.75 straddle 180-182 vol 20.15 -.85%

Option open interest:  Calls 430,495 +4,599  Puts 325,700 +20,021
 Total: 756,195 +24,620

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.

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

Brazil’s Center-South has seen some ample rain in recent days and the Piracicaba region has received 215mm since the start of February, compared to the monthly average of 200mm, according to Somar. UNICA has noted that ethanol sales in the region dropped to 2.5 billion L in January, down 5.5% on year, mostly due to the seasonal change in prices.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). Indonesia will need to import 1.4 million mt of raw sugar or 1.33 million mt of refined sugar for household use to avoid prices from surging in early 2021, according to the Indonesian Sugar Association.

In the USMCA region: US futures were relatively tame following yesterday’s WASDE release. Please be sure to read our update under separate cover. May closed five higher at 26.65, while July finished five points to the upside at 27.05. The back months closed unchanged to 45 points higher in November which saw 106 lots trade today to 27.50. Today’s final volume totaled 415 contracts, which included 297 lots of EFPs.

Best Regards,

Jeff Dobrydney JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. 203.853.3000




This report has been compiled for general informational purposes only. While efforts have 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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