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MORNING SUGAR REPORT

Friday July 31, 2020

WORLD SUGAR #11

World sugar futures have rallied aggressively on technically backed month end buying and have traded to the highest levels the market has seen since March. October sugar is now 37 higher at 12.49, as of 10:50AM EST, trading from 12,11 to 12.49 while March is last 33 higher at 13.06. More than 75,000 lots have traded between October and March to this point. On spread, the October/March has traded from 61 to 56 under and last at 58 points discount. The March/May has traded from 29 to 24 over and last at 25 points premium.

SUGAR #11 OPEN INTEREST:  V0: 381,909 +1,734  H1: 236,933 -216  K1: 99,172 -480 TOTAL: 966,790

SUGAR #11 OPTION WATCH

ATM VOLS: u 12.25 straddle 57-61 vol 27.70 unch v 12.25 straddle 93-97 vol 27.35 +.25% f 13.00 straddle 149-154 vol 23.88 +.10% h 13.00 straddle 180-184 vol 24.00 unch k 12.50 straddle 183-190 vol 22.30 unch

TRADES OF NOTE: 1,450 V 12.50/11.25 FENCES VS 12.34 TRADES 12 (PAPER BOUGHT CALL) 1,250 V 12.75 CALLS VS 12.37 TRADES 32 (PAPER SELLS

LONDON #5 In London, October is last $3.70 higher at trading from $362.70 to $368.90 to this point. On spread the October/December is last MACRO BYTE U.S. incomes fell more than expected in June as the effects of the government’s one-time stimulus checks dissipated, though an increase in unemploymentinsurance payments pointed to the importance of expiring federal relief. Personal incomes declined 1.1% from the prior month, a Commerce Department report showed Friday. The median estimate in a Bloomberg survey of economists called for a 0.6% drop. Consumer spending increased 5.6% in June, after jumping by the most on record a month earlier. While the income decline reflected the continued unwinding of April’s sharp gain from one-time stimulus, unemploymentinsurance payments actually increased in June by an annualized $111 billion -- likely reflecting states working through backlogs of applications, even though joblessness has fallen.That increase, stemming mainly from the federal government’s supplemental $600 in weekly jobless benefits, highlights the importance of the payments that expire today, with Congress failing to reach an agreement on additional aid. $0.20 lower at $4.10 premium. The October/October is last $100.50, unchanged on the day.

GLOBAL FUNDAMENTALS

Cash-wise: Today’s CFTC Commitment of Traders report incorporates a period where October traded from 11.48 up to 12.27 during the reporting week. We believe that the supplemental spec position has gone from an 81,412-lot long to a long position of around 100,250 lots. October open interest went from 378,650 lots to 380,481 lots. March open interest has gone from 227,825 to 236,672 lots. Total open interest has gone from 943,048 to 963,358.

Brazil’s mills have already locked in prices for 2022-2023 through the combination of New York futures and currency hedges, Plinio Nastari, president of consulting firm Datagro, said in telephone interview – and reported by Bloomberg. By selling sugar forward for the next two years, millers can make 2.3 cents to 2.4 cents per pound above the price expected for ethanol, Nastari said, adding the low liquidity in Brazil’s ethanol futures market doesn’t allow much visibility for the biofuel ahead.

GLOBAL CURRENCY UPDATE  USD: 93.075 +0.02%  BRL: 5.2140 -1.13%  INR: 74.850 +0.09%  MXN: 22.195 -0.76%

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.

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