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Thursday March 26, 2020

World sugar futures consolidated today, holding to the range seen over the past two sessions. May settled eight lower at 11.33 and the back months from two to six lower. Outright traded volume was 131,073 lots. On spread, May/July traded from 17 to nine over and last at 10 over. July/October traded from 11 to 15 under and last at 13 under. WTI Crude held to the core of the past week’s range. The Brazilian real again tested back up trough 5.00 to the dollar, but could not make any real headway, holding to Wednesday’s best levels.

Option watch: Option volume was 28,817 contracts consisting of 13,785 Calls and 15,132 Puts. Volatility was the talking point today as it was heavily sold. Trades of note: 1,500 May 12.00/July 10.50 1x2 Put Spreads vs 11.45/11.32 trade 7, 1,000 May 11.00 Puts trade 25-27, 400 May 12.00/12.25 Call spreads vs 11.50 trade 6, 2,500 July 9.50 Puts vs 11.24 trade 14, 1,750 July 11.00 Puts vs 11.21 trade 55, 1,500 July 13.00/12.00 2x1 Call Spreads trade -1/+2, 1,000 July 14.00 Calls trade 9, 500 October 13.00 Puts trade 193-200, 1,100 March 15.00 Calls vs 11.92 trade 34-35, 350 March 12.50 Calls vs 11.85 trade 87 and 400 May21 10.50 Puts vs 11.70 trade 56. ATM Vol's: May 11.25 Straddle 78-80 - vol 37.15, -4.0 % June 11.25 Straddle 109-112 - vol 32.55, -3.0 % July 11.25 Straddle 130-134 - vol 31.35, -3.0 % October 11.25 Straddle 172-177 - vol 28.10, -2.3 % Option Open Interest: Calls 390,810 +8,199, Puts 319,595 +580 - total 710,405 +8,779

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. New nominations include 33,000 tonnes to Georgia, 50,504 tonnes to Nigeria and 29,400 tonnes to Tunisia. 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. 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. As we transition to the official, statistical start of the new crop in Brazil, a total of 68 mills should start grinding by the end of March, less than the 80 mills that were active last year. The Thai sugar crushing season is officially over with the last 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 tonnes. Domestic sugar demand is expected to drop to 2.4 million tonnes which means the domestic quota of 2.5 million tonnes is enough, but there are another 2.0 million tonnes in reserve just in case, it added. Meanwhile, the Cabinet has approved a new sugar and cane bill that aligns industry policies with WTO rules, such as amending the sugar fund and allowing imports under license.

In the USMCA region: US futures trading was quiet today – activity was confined to light traffic in the Q1’21 positions at 26.75. Prices settled unchanged in May at 26.75 and from 25 higher in July to five lower in red July. Conadesuca posted an updated balance sheet for the Mexican market for the current year today, reflecting the revised estimate of exports to the US of 1.492 million tonnes tel quel. The S&D shows production unchanged from the prior estimate at 5.672 million tonnes, 370,000 tonnes of exports under the IMMEX program, 64,763 tonnes of “world market” exports and ending stocks of 923,063 tonnes as of 9/30/2020, a reduction of 246,000 tonnes on the year, but not unusual.

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 26.75 Mexican peso to USD: 23.1802 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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