Print
Tuesday, March 24, 2020

World sugar futures have surged higher this morning, following a session yesterday that saw good strength on nearby spreads and today a recovery in oil prices. May Sugar is last 37 points higher at 11.41, trading from 11.22 to 11.55 to this point, leaving a seven-point gap on the open. July is last 35 higher at 11.25, trading from 11.07 to 11.40 thus far. Just about 35,000 lots have traded between May and July to this point. On spread, the May/July has traded from 16 to 14 over and last at 14 points premium. The July/October has traded from 15 to 13 under and last at 13 points discount.
Macro Byte
President Donald Trump said the American economy can’t remain slowed for too long to fight the coronavirus, declaring that the country “was not built to be shut down…American will again, and soon, be open for business. Very soon.” U.S. index futures hit limit up today.

The U.K. has pledged more fiscal stimulus to fight the economic fallout from the coronavirus than during the global financial crisis a decade ago. Prime Minister Boris Johnson’s government has allocated a total of almost £57.0 billion in direct support since the Budget on March 11th. The aid, which includes an unprecedented promise to pay the wages of employees at risk of losing their jobs, amounts to 2.50% of gross domestic product.

Option Watch: k 11.50 straddle 100-104 vol 44.28 +3.2% m 11.25 straddle 125-130 vol 36.68 +.80% n 11.25 straddle 148-154 vol 35.30 +.50% v 11.50 straddle 187-194 vol 30.30 +.10%

Trades of note: 1,700 k 12.50 puts vs 11.40 trade 128 (paper buys) 2,000 v 12.75/11.50 ps vs 11.42 trades 79 (paper sells) 500 v 12.25/11.25 ps vs 11.52 trades 55 1,000 v21/v22 13.00 ps trade 35

India is not expected to export any sugar in the next 20 days until the coronavirus outbreak can be assessed and further steps taken, Meir Commodities said in a note for Marex Spectron. Some major sugar exporting ports in India are at a “standstill” amid lockdowns and a labor exodus from cities. India has contracted about 3.5m tons of sugar exports, of which about 0.5m tons will be renegotiated based on virus developments. No more raw sugar is expected to be exported from India as production at most mills will end soon.

The JOB Economia Index for sugar in 50kg bags in Sao Paulo is down 4.3% on the week at $257.00 per tonne (11.66), through March 20th. The price equivalent for hydrous ethanol with raw exports FOB is 9.60, which is down 14.2% on the week and has come under much more pressure since. Anhydrous ethanol prices are valued around 10.75, down 11.0% on the week. Several mills in CS Brazil are considering delaying the start of the harvest by 1-2 weeks because of the labor restrictions as a result of the coronavirus outbreak, according to RPA Consultoria.


















Thai mill sales for the domestic market dropped to 2.48 million mt in 2019, lower than in 2018 and 2017, including 530,000mt in Oct-Dec, from the 640,000mt average for the period, according to data analyzed by APIC Consulting.

The Government of Mexico yesterday notified the US DOC that, after prioritizing domestic needs, Mexico will be able to ship 1,421,901 tonnes of sugar to the US in the current fiscal year. This is made up of 815,605 tonnes tel quel of “other sugars” and 606,295 tonnes of refined sugars, pol’ing 99.2 degrees and higher. The amount is essentially the December Export Limit amount (1.461 million short tons - 80 % of 1.827 million short ton Target Quantity of US Needs) plus the 200,000-ton increase announced earlier this month (1.661 million strv=1.421 million mttq). The amount is 496,000 short tons higher than the USDA’s estimate in the March WASDE but 272,000 tons below the 1.933 million-ton Export Limit calculated by DOC and offered to Mexico earlier in the month. Inserting the 1.661 million tons figure into the March WASDE yields an 11.28 % stocks/use ratio. It would take an additional 272,000 tons of stocks to achieve a 13.5 % stocks/use ratio. As a side note, the Mexican peso continued its historic descent, easing to 25.2423 to the dollar this afternoon.

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



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.

Joomla! Debug Console

Session

Profile Information

Memory Usage

Database Queries