Thursday December 2, 2021

World sugar futures finished mixed following another choppy session. March settled two higher at 18.62 after ranging from 14 lower to 18 higher while the back months settled from six to 21 lower. Outright traded volume was 114,194 lots. On spread, October/March widened from 29 to 42 over and last traded at 41 over. May/July traded from 21 to 31 over and last at 30 over. The energy markets saw good activity on both sides of unchanged today as did the broad Bloomberg Commodity index, though both the Ags and Softs subindexes were in the black for nearly all of their sessions today.

Option watch: Sugar option volume was moderate with 25,103 contracts changing hands. Volume consisted of 14,306 Calls and 10,707 Puts. Paper was seen buying March 18.75 Calls. January volatility with nine days remaining was under pressure with the balance of the board slightly higher. Trades of note: 749 January 19.00 Calls trade 17-23, 694 January 18.50 Puts vs 18.60 trade 27, 401 January 18.50 Straddles trade 66-68, 1,000 February 17.50 Puts trade 16-18, 500 February 19.00 Calls vs 18.62 trade 47, 500 February 18.50 Puts trade 52, 500 March 18.00/February 18.50 Diagonal Put Spreads vs 18.82 trade -3, 400 February 19.50 Calls trade 29- 31, 2,500 March 18.75 Calls trade 69-79, 500 March 20.00 Calls trade 34-40, 552 March 17.25 Puts vs 18.57 trade 25, 500 March 19.00 Calls trade 65-66, 598 March’23 22.00/17.25 Fences trade 66-69 and 250 March’23 17.00 Puts trade 110-111.

ATM Vol’s: January 18.50 Straddle 62-65 - vol 21.90, -.60 % March 18.50 Straddle 156-159 - vol 23.20, +.65 % May 18.25 Straddle 201-205 - vol 22.65, +.30 % July 18.00 Straddle 230-237 - vol 22.25, +.25 %

Option Open Interest: Calls 371,352 +2,770, Puts 248,878 +1,625 - total 620,230 +4,395

According to Williams SA the Brazilian line-up of raw sugar vessels waiting to load is now 981,077 tonnes of sugar, which is again lower on the week and the lowest it has been since April. This compares with 1.3 million tonnes last week and 1.82 million tonnes last year. Approximately 175,000 tonnes of sugar shipped on the week. New nominations include 51,450 tonnes to Egypt and 43,000 tonnes to Iran. Indian sugar mills have accelerated cane crushing and have produced 4.72 million tonnes (white value) of sugar, nearly +10 % higher year on year said, India sugar mills association in a statement. This comes from 47.8 million tonnes of cane with an average recovery rate of 9.4 %. A total of 416 mills are crushing, eight higher on the year. ISMA said crushing operations in all the other states have also begun and the pace of crushing is picking up.

In the USMCA region: US futures prices settled seven lower in January at 36.95 and from seven lower to two higher across the balance of the board. The May’22 futures rallied to 37.75 on 55 lots of buying while the CY’23 months rallied to 33.25 across the board, tacking a few points on to the recent gains. Kellogg and the Bakery, Confectionery, Tobacco Workers and Grain Millers International Union reportedly reached a tentative agreement on a contract covering more than 1,000 employees. The union is expected to vote on the package Sunday, potentially ending the strike which has lasted nearly two months. Mexican sugar production through November 27th (Week 9 of the crop) totaled 63,821 tonnes of sugar from 660,803 tonnes of cane. This brings total production from the crop to 124,486 tonnes from 1.324 million tonnes of cane. Production to date lags both last year and the official plan for the crop. However, total area harvested stands at 15,280 hectares versus 19,360 hectares at Week 9 last year – 21.1 % lower. Ag yield, at 86.63 tonnes per hectare, is 23 % higher than last year and industrial yield, at 94 kilos of sugar per tonne of cane, is 9.8 % higher than last year. While 25 mills were expected to be grinding by November 27th , only 17 mills had in fact begun operations.

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Regards,

JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. (203) 853 3000 JSG Indications: Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Raws: 37.50 37.30 37.50 37.50 36.00 33.20 Mexican peso: 21.2675 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.