MORNING SUGAR REPORT

Monday November 22, 2021

2021 JSG Commodities NYC Conference December 16th – Convene 1 Liberty Plaza - NYC

Register Now!! 

World sugar futures have come under pressure this morning with a strong dollar, weak Brazilian Real and weak softs as a back drop. March #11 is last 28 points lower at 19.72, trading in a 20.10 down to 19.68 range as of 10:00AM EST. May is last 29 lower at 19.44, trading from 19.83 to 19.41. More than 35,000 lots have traded between March and May to this point. On spread, the March/May has traded from 25 to 31 over and last at 31 points premium. The May/July has traded from 33 to 37 over and last at 35 points premium.

SUGAR #11 OPEN INTEREST:  H2: 394,426 -1,759  K2: 158,922 +908  N2: 125,295 +297 TOTAL: 926,143 (+66,000 since 10/25)

SUGAR #11 OPTION WATCH ATM Vols. f 19.75 straddle 80-82 vol 20.05 -.35% h 19.75 straddle 173-178 vol 23.05 -.50% k 19.50 straddle 222-229 vol 22.90 -.45% n 19.00 straddle 248-260 vol 22.40 -.30% trades of note: 500 h 25.00 calls trade 7 300 h 23.75 calls trade 11 300 h 23.50 calls trade 12

MACRO BYTE Short-term Treasury yields and the dollar rose after U.S. President Joe Biden decided to nominate Jerome Powell to a second term as head of the Federal Reserve. The yield on the two-year Treasury note extended its climb, rising as much as 6.5 basis points to 0.572%, the highest this year. The five-year note’s yield also reached a 2021 high. The 10-year rate was steady at around 1.59%. Markets moved to price in a full quarter-point rate hike into the June Fed meeting, bringing forward anticipated tightening, while the Bloomberg dollar index rose as much as 0.3% to the highest level since September 2020 and U.S. stock index futures firmed. 400 h 22.50 calls trade 23 400 h 22.00 calls trade 30-33 250 h 19.50 puts trade 48 250 k 20/22 cs vs 17.50 p trade 20

LONDON #5

In London, March is last $6.00 lower at $506.60, trading from $513.70 to $506.10 to this point. On spread, the March/May is last $0.20 lower at $0.20 premium. The March/March white premium is now trading $72.00, unchanged.

GLOBAL FUNDAMENTALS

Cash-wise: Friday’s CFTC Commitment of Traders Report showed a net spec long position, excluding the index length, of 189,594 lots as of last Tuesday’s close, just about 30,000 lots higher over the last three weeks and a bit higher than market expectations. The large specs were net long 139,095 lots after adding 12,077 longs and covering 3,367 shorts. The small specs were net long 50,499 lots after liquidating 1,395 longs and covering 1,711 shorts. The net index fund long has a position of 191,771 lots as they added 1,450 longs and added 632 shorts. The commercials liquidated 4,036 longs and added 11,388 (+20K in 2 weeks) shorts on the week to bring their position to 276,185 lots short, or 14.08 million tonnes. Sugar #11 moves up one slot to 5th largest money-managed long

Over the course of the COT week, the U.S. dollar appreciated by 2.09% while the Bloomberg Agricultural Commodity Subindex rallied by 3.27%. Soybean Meal, which was recently the shortest agricultural commodity on the board, showed the largest change to the upside in its spec position at 13.0% of its historical range while London cocoa was the only agricultural commodity to show a decline on the week by 4.0% of its historical range – the spec position in London cocoa is now down by 43.0% of its historical range over the past four weeks. Despite the rally that occurred in the U.S. dollar, causing it to touch the 50.0% retracement of the move from the high that occurred in March 2020 to the low that occurred in January 2021, agricultural commodities showed inflows from the spec as energy prices started to fall. New York coffee is once again the longest agricultural commodity relative to its historical range while New York cocoa is the shortest.

According to Louis Dreyfus from the Marex Sugar Symposium in London, Brazil CS sugar production is forecast at 32.928 million tonnes next year, compared to a 31.9 million tonne harvest this year. Louis Dreyfus forecasts a 45% sugar mix, with cane crush increasing from 521.0 million tonnes to 545.45 million tonnes.

Tropical Research Services has forecast a global sugar deficit of 4.0 million tonnes in 2022-23, following a deficit seen of 6.63 million tonnes in the current 2021-22 season. This would represent a fourth consecutive global deficit, with the stocks-to-use ratio projected to fall to 38.7%, the lowest since 2004-05. Both estimates are far higher than general market expectations at this stage.

GLOBAL CURRENCY UPDATE  USD: 96.401 +0.39%  BRL: 5.6012 +0.15%  INR: 74.403 -0.06%  MXN: 20.976 +0.61%

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.