MORNING SUGAR REPORT

Wednesday June 24th, 2020

WORLD SUGAR #11

World sugar futures have shown mixed results thus far today – July, which is set to expire on Tuesday, is 11 higher at 11.90 at 9:00 a.m. in New York – at the session’s high after a pull-back to 11.65. The deferred positions range from six higher in October to 22 lower in red July. On spread, July/October has narrowed from 13 to seven under and is last seen at nine under. October/March has traded from 64 to 61 under and is last at 61 under. The nearby Whites premium has retreated to $96 value – August has failed to take the July raws sugar higher on the recent rebound and is last $3.60 lower at $359.00.

Option watch:
• August 12.00 straddle 67-70 vol 29.60 -.40% • September 12.00 straddle 102-106 vol 28.30 -.50% • October 12.00 straddle 127-130 vol 28.20 -.35% • March 12.50 straddle 196-202 vol 24.85 -.30% • May 12.25 straddle 200-210 vol 23.25 -.25%

Trade of note:
• 800 h 14.00 calls vs 12.45 trades 46 (paper sells)


GLOBAL FUNDAMENTALS
UNICA will release crop data through the first-half of June this morning. A Bloomberg survey predicts sugar production of 2.75 million tonnes and ethanol production of 1.81 billion liters from 43.13 million tonnes of cane.

Ample water in reservoirs following bountiful rainfall last year may lead to over 14 % rise in India's sugar production in the season starting October, said Prakash Vaisnavara, managing director of the National Federation of Cooperative Sugar Factories, according to Cogencis. The federation sees India's 2020-21 (Oct-Sep) sugar output at 31.2 million tonnes. For the 201920 season, it had pegged the output at 27.2 million tonnes. Sugar output in
MACRO BYTE

The U.S. is weighing new tariffs on $3.10 billion of exports from France, Germany, Spain, and the U.K, adding to an arsenal the Trump administration is threatening to use against Europe that could spiral into a wider transatlantic trade fight later this summer. According to a notice published late Tuesday evening, the U.S. Trade Representative wants to impose new tariffs on European exports like olives, beer, gin, and trucks, while increasing duties on products including aircrafts, cheese, and yogurt.
Brazil’s central bank said it’s close to the lower limit for its benchmark interest rate and reiterated that any future reduction in its record-breaking easing cycle would be residual. The bank’s board said second quarter economic data corroborates views of a sharp drop in gross domestic product with only a partial recovery in May and June.

















Uttar Pradesh is likely to correct to 12.0 million tonnes in 2020-21. This year, more cane was diverted to sugar mills as gur and khandsari manufacturers shut operations early amid COVID 19-related lockdown, Naiknavare said. Maharashtra– the second largest producer–is likely to produce 8.8-9.0 million tonnes sugar in 2020-21 against 6.0 million tonnes this season, while output of the third largest producer, Karnataka, is seen rising to 4.5 million tonnes from 3.5million tonnes in 2019-20

Based on data from Cepea/Esalq, the ex-mill price of hydrous in Sao Paulo dropped by 0.83 % last week – the first drop in two months. The price of anhydrous was up by 0.82%. As of Monday, there export sugar commanded a $44.75 per tonne premium over domestic hydrous prices, according to S&P Global Platts. Hydrous demand is still 30 % below last year and gasoline has gained market share, according to UNICA.

Copersucar stated that the bulk of its 2020-21 sugar sales have been hedged – a fairly common disposition these days given the value of the real versus the US dollar. The company sees ethanol demand in Brazil down 20 % to 30 % compared to a 50 % decline estimated in April.






Best Regards,

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.

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