MORNING SUGAR REPORT

Friday May 22, 2020

WORLD SUGAR #11

World sugar futures have continued to feel pressure following yesterday’s pre-holiday weekend profit take decline. July is last 25 lower at 10.73, while October is last 21 lower at 10.79. More than 30,000 lots have traded between July and October to this point. On spread, the July/October has traded from one to six under and last at six points discount. The October/March has traded from 68 to 72 under and last at 72 points discount.
SUGAR #11 OPEN INTEREST:
 N0: 306,608 -8,328  V0: 247,525 +2,465  H1: 167,539 -584

TOTAL: 976,353 -3,549
JSG Spec Live Call: +4,500 LONG
SUGAR #11 OPTION WATCH

ATM VOLS: n 10.75 straddle 80-84 vol 37.55 +.20% q 10.75 straddle 109-114 vol 34.10 +.15% v 10.75 straddle 154-159 vol 32.37 unch h 11.50 straddle 225-231 vol 29.35 unch TRADES OF NOTE: 250 V 10.00/12.00 FENCE TRADES -5 200 V 9.00/8.50 PS VS 10.84 TRADES 7 200 V 10.25 PUTS VS 10.79 TRADES 53
LONDON #5
In London, August is last $1.80 lower at $363.50 trading from $359.50 to $363.80 to this point. On spread the August/October is last $3.50 higher at $24.60 premium. The August/July white premium is last at $127.50, up $6.00 on the day.
MACRO BYTE
The Chinese government abandoned its decades-long practice of setting an annual target for economic growth amid the storm of uncertainty unleashed by the coronavirus pandemic, and said it would continue to increase stimulus.
Brazilian President Jair Bolsonaro and state governors publicly endorsed an economy ministry’s proposal to freeze public servants’ salaries until the end of 2021 as part of a financial aid package during the pandemic. The agreement was reached during a virtual meeting with all 27 governors on Thursday plus the heads of both houses of congress and the economy minister.













GLOBAL FUNDAMENTALS
Cash-wise: Today’s CFTC Commitment of Traders report incorporates a period where July traded from 10.10 up to 10.98 during the reporting week. We believe that the supplemental spec short position has gone from a 36,870-lot short to a short position of around 21,750 lots. July open interest has gone from 334,248 to 323,589. October open interest has gone from 238,087 to 236,310 Total open interest has gone from 963,061 to 970,769. We believe the spec is currently running a small long position in sugar on a live basis.

The USDA’s Foreign Ag Service has published its biannual Sugar: Markets and Trade report, which can be seen here.

Egypt has 2 million mt of sugar in stocks, enough to meet demand for 5 months, the supply ministry said.

Mexican sugar exports through May 17th have totaled 966,691 tonnes, 52.1 % of the estimated exports of 1.857 million tonnes for the fiscal year. In the most recent week 17,386 tonnes shipped to the US and 6,342 tonnes shipped under Mexico’s IMMEX program. Looking at the prospects for the tail of the current Mexican crop, it is interesting to note that 30 mills had closed as of May 16th (Week 33) versus just 12 mills by the end of last year’s Week 33. Last year, it was the last week of May before the 30th mill shut down – the remaining 20 mills produced ~167,000 during the remainder of the crop. Based on this metric, the USDA estimate of 5.125 million tonnes tel quel for the crop is likely within 25,000 tonnes of reality.

Weather Map: Brazil % Of Normal Precipitation for the Month of May



GLOBAL CURRENCY UPDATE  USD: 99.816 +0.42%  BRL: 5.5957 -0.77%  INR: 75.950 -0.44%  MXN: 22.947 -0.51%



Best Regards,

Jeff Dobrydney Senior Vice President Head of Futures & Options JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. 203.853.3000 www.jsgcom.com

This report has been compiled for general informational purposes only. While every effort has been made to ensure accuracy, Jenkins Sugar Group, Inc. assumes no responsibility for errors and omissions.