MORNING SUGAR REPORT

Tuesday June 30, 2020

WORLD SUGAR #11

World sugar futures have pressed higher this morning on the end of the first half of 2020 and expiry of the nearby July contract which looks to be an extremely small delivery. July is last 13 higher at 11.84, trading from 11.68 to 11.90 so far. October is last 17 higher at 11.94. Fewer than 35,000 contracts have traded between July and October to this point. On spread, the July/October has traded four to 11 under and last at 10 points discount. The October/March has traded from 63 to 59 under and last at 60 points discount.
LONDON SUGAR #5
In London, August is last $5.60 higher at $357.80, trading from $352.60 to $361.30 to this point. On spread, the August/October is down $0.10 last at $1.10 premium. The August/July white premium is hovering around $97.00, up $4.00 on the day.

SUGAR #11 OPEN INTEREST
July 2020: 4,823 -5,215 October 2020: 412,474 -1,635 March 2020: 192,776 +449 Total: 917,779
SUGAR #11 OPTION WATCH
q 12.00 straddle 54-57 vol 28.00 +.40% u 12.00 straddle 91-96 vol 26.55 +.10% v 12.00 straddle 115-119 vol 26.50 +.20% h 12.50 straddle 180-186 vol 23.15 unch k 12.25 straddle 180-190 vol 21.25 unch trade of note:
1,300 v 14.00 calls trade 9-10


MACRO BYTE
Chinese President Xi Jinping signed a landmark national security law for Hong Kong aimed at quashing threats to national security. The legislation was passed by senior Chinese lawmakers, according to a senior adviser to Beijing on Hong Kong policy. The law is meant to prevent and punish subversive, secessionist and terrorist activities.
Brazil analysts lowered their year-end forecasts for both the benchmark interest rate and gross domestic product amid the coronavirus pandemic’s unchecked spread. The benchmark Selic rate will end this year at 2.0%, down from last week’s forecast of 2.25%, according to a central bank survey.

















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GLOBAL FUNDAMENTALS
Cash-wise: The JOB Economia Index for sugar in 50kg bags in Sao Paulo is down 1.4% on the week at $265.00 per tonne (12.02), through June 16th. The price equivalent for hydrous ethanol with raw exports FOB is now valued around 9.60, which is down 1.8% on the week and very comparable with where prices were this time a year earlier (chart below). Anhydrous ethanol prices are valued around 10.40, up 0.3% on the week.









There was some chatter that Petrobras was going to increase ex-refinery gasoline prices this week may not happen given the fall in world energy prices at the end of last week, according to SCA Trading. This means there is not much room for the price of hydrous to increase without losing competitiveness at the pump, it added. However, the Association of Sugarcane Suppliers in Pernambuco (AFCP) expects that the demand for 70% ethanol both in the domestic and export market will continue to be strong.

According to China’s commerce ministry, sugar importers, excluding those have been allocated low-tariff quotas, will have to report their purchases beginning July 1st. The ministry has had a reporting system since 2008 that requires buyers to report their imports of major farm products.

According to Rabobank’s quarterly market report, Australian sugar production is forecast to be around 4.4 million tonnes in 2020-21, unchanged on the year, while Indian production is seen at 33.5 million tonnes. Thailand production is seen around 8.15 million tonnes. Global sugar consumption has been revised to decline 1.0% year on year for the year ending in October.
GLOBAL CURRENCY UPDATE
• USD: 97.589 -0.16% • BRL: 5.4632 -1.07% • INR: 75.507 +0.10% • MXN: 23.141 -0.28%


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

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