Tuesday July 28, 2020

World Sugar Futures were unable to break through important technical levels above the market early in the session, despite a strong start, and ended up trading lower in much calmer action. October finished 11 points lower and settled at 12.01, while March closed nine points to the downside to settle at 12.63. During the early portion of today’s action, October traded up to 12.27, two points shy of matching the high on the continuation chart dating back to March 11th. Today’s volume was about half of what the market saw trade yesterday; a total of 113,991 contracts traded. On spread, the October/March gave back some of yesterday’s gains, trading from 59 to 65 under and last at 62 points discount. The March/May has traded from 28 to 20 over and last at 22 points premium.

Option watch: Option volume was 33,035 contracts consisting of 23,816 Calls and 9,219 Puts. Volatility falls across the board. Paper was an aggressive buyer early of live calls.

Trades of note:  3,000 September 12.75 Calls trade 9-17  4,800 October 15.25 Calls trade 2-4  2,000 October 15.50 Calls trade 3  795 October 11.75 Puts vs 12.23 trades 29-30  600 October 12.50 Calls vs 12.24 trades 38  535 October 11.50 Puts vs 12.00 trades 27  500 October 12.50/ March 9.75 1x3 Fence trades 2-4  600 January 10.00 Puts trade 6  700 March 11.75 Puts vs 12.76 trades 47

ATM Vol’s:  September 12.00 Straddle 59-62 vol 26.15 -2.5%  October 12.00 Straddle 94-97 vol 27.00 -1.0%  January 12.50 Straddle 147-152 vol 23.75 -.50%  March 12.50 Straddle 178-183 vol 24.20 -.30%

Option open interest:  Calls 286,745 +3,864  Puts 229,982 +1,971  Total: 516,727 +5,835

Cash-wise: There have been no official releases on China’s rumored AIL import increases that dominated yesterday’s market commentary. We will continue to monitor the latest news. The JOB Economia Index for sugar in 50kg bags in Sao Paulo is down 0.2% the week at $253.00 per tonne (11.47), through July 24th. The price equivalent for hydrous ethanol with raw exports FOB now valued around 10.00, which is up 3.0% on the week and slightly lower compared to where prices were this time a year earlier (chart below). Anhydrous ethanol prices are valued around 10.60, up 3.1% on the week. Brazilian sugar exports may close July at around 3.35 million metric tonnes, close to the monthly record of 3.5 million metric tonnes reached in September 2017. Brazil has already exported 2.63 million metric of sugar in July, a volume higher than the total of 1.82 million metric tonnes shipped in the same month of 2019, informed the Secretariat of Foreign Trade (Secex).The beet tests conducted so far suggest that Russia's sugar output will fall to 5.7- 6 million metric tonnes next year, down 19-23% on year, according to Soyuzrossakhar. Nonetheless, stocks will reach a record 3.1 million mt by August 1st, while exports will be key to balance the market, it added.

In the USMCA region: US Futures saw just a couple trades in the summer months of 2021 in what was a quiet session. Nearby September closed 25 points higher at 27.25 while November closed in the same fashion, at 27.25. The deferred positions closed unchanged to five points to the upside. Final volume was 164 contracts. USDA crop condition reporting through Sunday are as follows: In Colorado, 64% of the crop was rated good or excellent and in Idaho 97% of the crop was rated good or excellent. In Michigan 68% of the crop was rated good or excellent; in Minnesota 92 %; in Montana 86 %; in North Dakota 94 %; and in Wyoming 92 % was rated good or excellent. Best

Regards,
Jeff Dobrydney
JSG Commodities
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203.853.3000

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.