Tuesday September 14, 2021

World sugar futures saw the bulls and bears fight to a near draw today on the final day of the index fund roll. October ranged from 20 higher to 18 lower before settling two lower at 18.96. March settled three lower and the back months from three to 20 lower. Outright volume was 200,262 lots. On spread, the October/March saw 53,544 lots trade between 68 and 74 under. The spread last traded at 72 under – the spread settled at 70 under after finishing at 71 under Monday and 72 under Friday. There were 5,489 lots of October/March TAS traded at par as well as 20,087 lots of October EFP’s and 1,441 October EFS’s. October OI stood at 209,472 lots prior to today’s activity – nearly identical to last year’s OI at the same point in time. March/May traded from 49 over to 43 over and last at 43 over. WTI Crude pushed to a new five week high at 71.22 before lapsing into consolidation mode. The Brazilian real remains in the middle of the past two weeks’ range.

Option watch: Option volume was 16,410 contracts consisting of 9,281 Calls and 7,129 Puts. Volatility finished the session slightly lower across the board. October options will expire at the close of business tomorrow. Paper was seen buying October 18.50 Puts today. Trades of note: 2,000 October 18.50 Puts trade 2-5, 690 October 17.50/20.50 Call Spreads trade 145, 295 October 17.75/20.50 Call Spreads trade 117, 250 October 19.00 Calls vs 18.98 trade 14, 400 November 21.00/22.50/23.00 Call Trees trade 15, 300 January 19.00/November 21.00 Diagonal Call Spreads vs 19.80 trade 123, 200 November 20.00/19.25 Strangles vs 19.65 trade 97, 600 May 19.00/January 19.50 Diagonal Put Spreads vs 19.22/19.65 trade 42, 324 March 19.75 Straddles vs 19.72 trade 292 and 250 March 19.75/21.75 Call spreads vs 17.25 Put trade 20.

ATM Vol’s: October 19.00 Straddle 26-28 March 19.75 Straddle 289-294 - vol 28.60, -.60 % May 19.25 straddle 315-323 - vol 27.05, -.40 % July 18.75 straddle 333-350 - vol 26.50, -.20 % Option Open Interest: Calls 399,889 +2,554, Puts 270,790 +1,669 - total 670,679 +4,223

The JOB Economia Index for sugar in 50kg bags in Sao Paulo is up 0.5 % on the week and up over 3.8 % in the last two weeks through September 10th at 21.81. The price equivalent for hydrous ethanol is up bit at 18.75 as prices remain firm. Anhydrous ethanol prices are valued around 20.80, up 4.8 % on the week. In India, sugar production in Maharashtra, the second largest sugar producing state, is expected to increase by 5.6 % to 11.2 million tonnes in the next sugar season beginning October 1 st. "The area planted under sugar cane for the 2021-22 sugar season has increased to 12.32 lakh hectare, while the per-hectare production of sugarcane is expected to be 97 tonnes. We expect that 193 sugar mills will be operational next season, which will crush 109.6M MT sugarcane," said a release issued by the government.

In the USMCA region: US futures saw renewed activity in the FY’23 positions today. November’22 saw 100 lots trade at 33.20 and March’23 saw 90 lots trade at 31.80. Prices settled 106 higher in nearby November at 36.06 (three lots traded at 36.05 during the session) and from unchanged to 19 higher elsewhere.

Tropical Storm Nicholas is forecast to become a tropical depression this evening and degenerate into a remnant low on Wednesday or by early Thursday. An eastward turn is expected over Louisiana by Wednesday and little motion is anticipated on Thursday. Nicholas is expected to produce additional rainfall amounts of 5 to 10 inches across portions of southern and central Louisiana, southern Mississippi, far southern Alabama, and the western Florida Panhandle through early Friday, with isolated storm totals of 20 inches possible from southern Louisiana to the far western Florida Panhandle. We noted yesterday that planting of new cane was 73 % complete as of Sunday versus 87 % last year and 70 % on the five-year average. We anticipate some delays in the start of the harvest campaign.

Reporting on the impact of Hurricane Ida has been mixed. Ida negatively impacted an estimated 118,000 acres of sugarcane crops in Louisiana, or about 26 % of the area expected for harvest, according to a preliminary report produced by the Louisiana State University and the Louisiana Sugarcane League and reported on by Reuters. The report indicates that the area hit by the storm will have agricultural yield losses ranging from 16 % to as high as 29 %. The report said that there was no serious damage to mills' infrastructure. Meanwhile, the Louisiana Farm Bureau reported that there is still time for cane to recover and that 61,000 acres saw “direct impact” and 68,000 acres saw “moderate impact”. Yield losses will be small for the areas most affected – between 10 and 15 % at most – according to the Farm Bureau as reported by Bloomberg. ASR reported a return to normal operations at its Chalmette refinery on Sunday.

Regards,

JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. (203) 853 3000 JSG Indications: Q3'21 Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Raws: 37.00 37.00 34.60 34.60 34.50 33.30 Mexican peso: 19.8772 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

Contact Information

JSG Commodities

(203) 853 3000

16 South Main Street
Suite 202,
Norwalk, CT 06854

Frank Jenkins
This email address is being protected from spambots. You need JavaScript enabled to view it.
Ken Lorenze
This email address is being protected from spambots. You need JavaScript enabled to view it.
Jeff Dobrydney
This email address is being protected from spambots. You need JavaScript enabled to view it.
Eric Bergman
This email address is being protected from spambots. You need JavaScript enabled to view it.
Stephen Ward
This email address is being protected from spambots. You need JavaScript enabled to view it.
Chris Cody
This email address is being protected from spambots. You need JavaScript enabled to view it.
Diana Nguyen
This email address is being protected from spambots. You need JavaScript enabled to view it.