News
MORNING SUGAR REPORT 3/26/2020
World sugar futures have remained steady this morning led by a surging London market that has seen the white premium jump $15.00 to just below $100.00. May New York is last eight higher at 11.49, trading from 11.37 up to 11.59 to this point. July has traded from 11.23 to 11.42 to this point and last eight higher at 11.35. More than 35,000 lots have traded between May and July to this point. On spread, the May/July has traded from 14 to 17 over and last at 16 over. The July/October has traded from 15 to 11 under and last at 12 points discount.
OPEN INTEREST UPDATE: May 2020: 317,278 (-4,659) July 2020: 251,355 (-3,590) Oct 2020: 182,619 +35 Total: 1,014,018 (-7,374)
Macro Byte
The Senate approved the largest economic stimulus package in recent memory, moving the estimated $2.0 trillion bill to the House as Congress seeks to give American families and businesses a shield against the coronavirus pandemic. Senators approved the legislation 96-0, with four senators absent.
Federal Reserve Chairman Jerome Powell said the central bank will maintain its muscular efforts to support the flow of credit in the U.S. economy. He said, “we will keep doing that aggressively and forthrightly, as we have been…when it comes to this lending we’re not going to run out of ammunition. That doesn’t happen.”
The European Central Bank scrapped most of the bond-buying limits in its 750 billion-euro pandemic emergency program, in a landmark decision that massively boosts its firepower to fight the economic fallout from the coronavirus.
Option Watch: k 11.50 straddle 90-96 vol 41.50 -.25% m 11.50 straddle 121-126 vol 35.58 -.40% n 11.50 straddle 145-150 vol 33.93 -.55% v 11.50 straddle 186-195 vol 29.95 -.30%
Trades of note: 500 k 9.50p trade 5 500 n 9.50/12.50 2x1 fence trades flat/1
250 n 11.00/10.75 ps vs 11.37 trades 10 1,392 n 13.00/12.00 2x1 cs trade 2, (same as yesterday, paper buys the 2 n 13.00c)
According to Williams SA the Brazilian vessel line-up of raw sugar waiting to load is now 716,697 tonnes of sugar, which is lower on the week. This compares with 883,795 tonnes last week. Approximately 250,000 tonnes of sugar shipped on the week. Here are the new nominations:
Destination Tonnage Port Port Company Georgia 33,000 Maceio Wilmar Nigeria 19,504 Santos Coper Wilmar Nigeria 31,000 Santos Rumo Sucden Tunisia 29,400 Paranagua Pasa Dreyfus
Total: 112,904
Most mills in Brazil’s Center-South will start the 2020/21campagin as scheduled despite the coronavirus restrictions because, otherwise, they won't be able to process all the cane, according to a survey by ProCana Brasil and the Human Resources Study Group in Agroindustry (Gerhai). The National Sucroenergetic Forum and UNICA added that the industry was exempt from many of the restrictions as food and energy production are considered essential. Mills crushed 3.0 million metric tonnes of cane in the first half of March and used 90% of the cane to make 243.76 million liters of ethanol, according to UNICA. 26 plants started operating in the period, bringing the total number of active units to 43, including three corn ethanol plants, compared to 26 cane units and six corn units active in the same period last year. A total of 68 mills should start by the end of March, less than the 80 last year. Sales of anhydrous ethanol reached 383.17 million L in the period, up 5.36% on year, while hydrous sales reached 690.96 million L.
Rabobank has projected a 600,000-tonne world sugar surplus for 2020-21 on the heels of a 6.7 million-tonne deficit in 2019-20, down from the prior estimate of 8.2 million tonnes. A 45 % sugar/55 % ethanol mix in Brazil for 2020-21 is an important driver for the updated S&D.
The Thai sugar crushing season is officially over with the last operating mill due to close on March 25th, according to the Office of the Cane and Sugar Board, with a total crush of 74.9 million mt. Domestic sugar demand is expected to drop to 2.4 million mt which means the domestic quota of 2.5 million mt is enough, but there is another 2.0 million mt in reserve just in case, it added. Meanwhile, the Cabinet has approved the new sugar and cane bill that aligns industry policies with WTO rules, such as amending the sugar fund and allowing imports with a license.
Mexican sugar production in the week ended March 21st exceeded last year’s production marginally (1,831 tonnes), totaling 262,857 tonnes. Unfortunately, it took 6.6 % more cane from 30.25 % more hectares to produce just 0.7 % more sugar. For the crop year to date 3.324 million tonnes of sugar has been produced versus 4.021 million tonnes last year. All but one mill was still crushing during the week. Production of “other sugars” during the week was 19,598 tonnes higher than last year at 44,650 tonnes. For the crop to date, 451,211 tonnes of “other sugars”, with pol of less than 99.2 degrees, have been produced – 55 % of the 815,605-tonne “other sugars” portion of the 1.422 million-tonne export limit Mexico staked out earlier in the week.
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.