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EVENING SUGAR REPORT 6/25/2020

Thursday June 25, 2020

World sugar futures held to an 18-point range in the spot July before settling six higher at 11.81. October settled eight higher at 11.92 and the back months from eight higher to five lower. Outright traded volume was 94,756 lots. On spread, July/October traded from seven to 14 under and last at 11 under. July OI stood at 36,030 lots prior to today’s activity, which included 17,242 lots of July EFP’s and 197 lots of July EFS’s. October/March traded from 64 to 66 under and last at 65 under. WTI was initially lower but broke above unchanged mid-morning in New York and remained firm through the balance of the Sugar session. The Brazilian real saw traffic above and below unchanged as well, consolidating in easier end of the past two weeks’ range.

Option watch: Options volume was 13,388 contracts consisting of 8,870 Calls and 4,518 Puts. Volatility was again negative with October falling six percent in a week. Trades of note: 1,000 May 13.00/August 12.25 Diagonal Call Spreads vs 11.83/12.23 trade 51 (paper buys May), 1,000 May 13.00/September 12.75 Diagonal Call Spreads vs 11.82/12.23 trade 49 (paper buys May), 300 August 12.00 Straddles vs 11.81 trade 67, 158 August 12.00 Straddles trade 56-65, 300 October 11.50 Puts vs 11.82 trade 44-45, 250 October 13.00/11.00 Strangles trade 49-50, 700 October 10.00 Puts trade 6-9, 500 October 12.50 Calls trade 34-37, 330 January 14.00 Calls trade 33 and 300 January 13.50 Calls trade 42. ATM Vol’s: August 12.00 straddle 55-57 - vol 24.80, -3.8 % September 12.00 Straddle 89-92 - vol 24.90, -2.5 % October 12.00 Straddle 111-114 - vol 25.00, -2.2 % March 12.50 Straddle 172-178 - vol 22.00, -2.0 % May 12.25 Straddle 178-190 - vol 21.00, -1.2 % Option Open Interest: Calls 260,855 +1,450, Puts 225,460 +1,405 - total 486,315 +2,855

Rabobank estimates that the global sugar market will see an 850,000 tonne surplus in 2020-21 following a deficit of 4.3 million tonnes in the current year – down from the prior estimate of 6.7 million tonnes. According to Williams SA, the line-up of vessels loading/nominated to load in Santos stood at 2.795 million tonnes as of Wednesday, up from 2.783 million tonnes the prior week. The line-up in Paranagua increased from 618,918 tonnes to 632,654 tonnes during the week. Citigroup has forecast that sugar prices will rally to 13.00 to 14.50 next year, lifted higher as the global economy recovers and energy prices improve. Citi sees prices averaging 11.00 to 13.00 during the second half of 2020. The Indian Sugar Millers Association has estimated 2020-21 sugar production at 30.5 million tonnes, a 12.1 % increase from the 27.2 million tonnes produced in the prior cycle. Given the projected availability of cane, sugar production could potentially reach 32.01 million tonnes, but diversion of cane juice b-molasses to ethanol production in Uttar Pradesh, Maharashtra and Karnataka will reduce sugar production by 1.5 million tonnes. Exports in 202021 are estimated at 6.0 to 7.0 million tonnes.

In the USMCA region: US futures remained nearly dormant today. September settled three lower at 25.97 and the back months finished unchanged. Mexican sugar exports through June 21st have totaled 1.120 million tonnes, including 869,406 tonnes shipped to the US under the Suspension Agreements (121,620 lots) and 216,569 tonnes shipped under Mexico’s IMMEX program. In the most recent week 9,098 tonnes shipped to the US and 5,747 tonnes shipped under the IMMEX program.

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: 25.80 25.95 26.15 26.45 26.65 26.85 Mexican peso v USD: 22.6657 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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