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Tuesday May 19, 2020

World sugar futures made a new high for the month today, beating the May 1st high of 10.97 by a point before easing back to settle five higher at 10.85 basis the July. The back months settled from unchanged in October to two higher in May. Outright traded volume was 143,566 lots. On spread, July/October narrowed from 11 under to four under and last traded at five under. October/March traded from 72 to 68 under and last at 71 under. Nearby WTI Crude rallied as high as $33.44 and the Brazilian real appreciated to 5.6842 today before easing back to 5.7573 – a pretty nice backdrop for Sugar #11.

Option watch: Option volume was 18,994 contracts consisting of 11,332 Calls and 7,662 Puts. Volatility moved slightly lower across the board. Trades of note: 2,250 July 9.25 Puts trade 4 (paper buys) 1,250 July 11.25/9.75 Fences vs 10.80 trade 17 (paper buys Call), 1,000 July 11.25/11.75 Call Spreads trade 14 (paper buys), 500 July 11.50 Calls vs 10.78 trade 18, 1,000 October 12.00/14.00 Call Spreads vs 10.96 trade 31 (paper buys) and 300 March 13.00/14.75 Call Spreads vs 11.68 trade 35. CSO’s: 800 July/October flat Calls trade 8 (paper buys). ATM Vol's: July 10.75 Straddle 83-86 - vol 36.15, -1.0 % August 11.00 Straddle 113-116 - vol 33.05, -.40 % October 11.00 Straddle 160-163 - vol 32.45, -.20 % March 11.50 Straddle 229-233 - vol 29.20, -.30 % Option Open Interest: Calls 318,498 +4,783, Puts 280,467 +1,443 - total 598,965 +6,226

The JOB Economia Index for sugar in 50kg bags in Sao Paulo is up 3.5 % on the week at $215.00 per tonne (9.71), through May 15th. The price equivalent for hydrous ethanol with raw exports FOB is 7.65, which is up 3.7 % on the week. Anhydrous ethanol prices are valued around 7.90, up 0.4 % on the week. In the April 1 – May 15, 2020 period, hydrous ethanol prices were between 21-23 % lower than in same period a year ago. Sugar, due to the weakened Brazil currency, is between 7-13 % higher. Sugar exports from Brazil have totaled 1.57 million tonnes thus far in May, an amount that already exceeds total shipments from May 2019, according to Secex. The EU should produce 17.357 million tonnes of sugar (including ethanol equivalent) in 2019/20, according to the latest European Commission estimate - almost unchanged from the previous estimate. The bloc exported 37,000 metric tonnes in April, down from 39,000 metric tonnes in March, according to data analyzed by Agranet.

In the USMCA region: US futures settled unchanged in July at 25.80 and from one lower in September to unchanged across theFY’21 positions. The day’s volume was confined mainly to the nearby July where 200 lots of likely refiner buying was absorbed by traders hedging fresh offshore purchases. We reported yesterday that the beet crop in Michigan was 94 % planted – well ahead of last year’s 66 % and ahead of the five-year average of 90 %. We understand that the crop has received flooding rain since, with some areas receiving as much as four inches. We’ll keep an eye
on this as June 1 approaches – a crucial threshold for beet plantings – but another round of replanting appears to be in the cards following the recent cold snaps.

Regards,

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

JSG Indications: Q2’20 Q3’20 Q4’20 Q1’21 Q2’21 Q3’21 Raws: USNH: 25.75 25.85 26.15 26.50 26.75 26.85 Mexican peso v USD: 23.7090 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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