Tuesday March 24, 2020

World sugar futures settled 23 higher in May at 11.27 and from 21 to four higher across the back months. Outright traded volume was 126,397 lots. On spread, May/July traded from 12 to 17 over and last at 16 over. July/October traded from 15 to 13 under and last at 13 under. WTI Crude posted some apparently nice gains, but in context just managed to consolidate in the middle of the past week’s range. The Brazilian real turned in a similar session.

Option watch: Option volume was 36,710 contracts consisting of 16,638 Calls and 20,072 Puts. Volatility was a bit lower across the board. Paper bought 2,000 May laid-up Puts early and sold 2,000 October Put Spreads laid-up. Trades of note: 2,000 May 12.50 Puts vs 11.40 trade 128, 780 March’21 14.00/May 9.50 Fences vs 11.95/11.50 trade 53, 543 May 10.50 Puts vs 11.27 trade 19, 525 May 13.75/9.50 Fences trade flat, 1,110 July 13.00/15.00 1x2 Call Spreads trade 9, 790 July 14.50 Calls vs 11.38 trade 11-12, 575 July 13.00 Calls vs 11.11 trade 20-21, 500 July 11.00 Straddles trade 145, 2,000 October 12.75/111.50 Put Spreads vs 11.42 trade 79, 500 October 12.00/13.50 1x2 Call Spreads trade 5, 500 October 12.25/11.25 Put Spreads vs 11.52 trade 55, 1,000 October’21/ October’22 Put Calendars trade 35 and 500 October’21 13.50 Calls vs 11.85 trade 65. CSO’s: 500 May/July flat Put Spreads trade 4. ATM Vol: May 11.25 Straddle 89-92 - vol 39.95 -.25 % June 11.25 Straddle 120-124 - vol 35.15, -.60 % July 11.25 straddle 143-147 - vol 33.92, -.75 % October 11.25 straddle 184-187 - vol 29.85, -.35 % Option Open Interest: Calls 374,424 +8,070, Puts 316,400 +5,286 - total 690,824 +13,356

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 3.5 million tonnes of sugar exports, of which about 500,000 tonnes 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 Brazil’s center-south 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 tonnes in 2019, lower than in 2018 and 2017, including 530,000 tonnes in Oct-Dec, from the 640,000-tonne average for the period, according to data analyzed by APIC Consulting.

In the USMCA region: US futures settled five higher in May at 26.75 and from 25 lower in July to five higher in the Q1’21 positions. Values continue to unravel – July saw a small block trade at
26.50, a full 139 points below the high seen during the first week of March. Volume was light – we’ll assign blame in equal parts to the global pandemic and to Mexico’s declaration regarding its Export Limit on Monday, which did little to clarify the timing and composition of a remedial quota increase by USDA. Mexican sugar exports through March 15th have totaled 509,370 tonnes. Exports have been comprised of 351,250 tonnes to the US under the Agreements (268,627 tonnes under of “other sugars”, 82,623 tonnes of refined); 4,005 tonnes to the US under the re-export program; 29,913 tonnes to non-US destinations and 124,202 tonnes under Mexico’s IMMEX program. For those keeping track, the Mexican peso recovered to 24.8149 today.

Regards,

JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. (203) 853 3000

JSG Indications: Q1’20 Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Raws: USNH: 26.40 26.50 26.75 26.80 26.80 26.85 Mexican peso to USD: 24.8149 Raws: “Fair value” #16 futures pre-close, or JSG estimate.

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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