Jenkins Sugar Group Evening Report                                         
 
Monday November 23, 2009
 
World sugar futures finished lower for a third consecutive session, with the March futures testing down to, and settling within close proximity of, critical support at 22.00-21.99. March settled 33 lower at 22.14 – prices finished the afternoon 35 lower in March, 29 lower in May and from 17.17 lower in July to 19 higher in red July. Volume was 70,419 lots. The session had a familiar rhythm, with the March testing up to 22.85 at the session’s outset, straining to test 22.90 early in the day in London, and then faltering early in the day in New York. Prices eased from 22.80 to 22.20 between 8:30 and 10:00 a.m. in New York and then continued down to a new low at 22.04 shortly before the official settlement. Prices consolidated above the lows through the last 30 minutes of trading. As witnessed by the settlements, the spread structure was under pressure. March/May, which finished last Monday’s session at 109 over, narrowed from 85 to 72 over today and last traded at 73 over. The May/July had maintained a better level of composure last week but narrowed from 141 to 121 over and last traded at 121 over today. Cash-wise, India is expected to receive around 700,000 tonnes of imported raw sugar and 110,000 tonnes of white sugar this month according to trade sources. Last month, the country received 496,560 tonnes of raws and 18,900 of whites. Chinese sugar imports from January to October totaled 1.1 million tonnes, 41.6% higher than last year’s. Sugar prices in China have rallied in the past month on expectations that erratic weather conditions will adversely affect production. Local analysts have estimated a deficit of two million tonnes in the 2009/10 crop year; starting October 1st. South Africa has lowered its forecast for this season’s sugar production down to 2.26 million metric tonnes from total sugarcane output of 19.2 million tonnes. Technically, March tested above the 10- and 20-day moving averages on the early rally, and sell stops were touched as prices retraced through these points and back through unchanged. The uptrend support line originating at the 21.18 low crosses that market tomorrow at 22.03. A move through this level (and today’s low) will set the March squarely on track for a test of the 21.78 low and perhaps 21.18. The RSI is 42.65 this afternoon – still innocuous, but matching the lowest reading dating back to October 28th.
 
In the NAFTA region: US futures trading remains erratic – prices settled unchanged in January, 59 lower in March and 37 higher in May. The session’s main activity was a small block of January/May traded at 50 points premium, a sharp contraction from the triple-digit premiums seen last week. The beet crop in the Red River Valley appears to have wrapped up for all intents and purposes. All nine agricultural districts in North Dakota reported average high temperatures of over 10 degrees above normal during the week, not ideal post-harvest conditions.