Friday April 19, 2024

World sugar futures turned in a mixed performance, with aggressive buying in the nearby spread failing to inspire the broader market. May settled 14 higher at 19.73 while July settled four lower at 19.50. October settled four lower and the back months from three lower to 26 higher. Outright traded volume was 136,736 lots. On spread, May/July widened from four over to 25 over and last traded at 22 over. Traded volume in the spread was just 18,254 lots. OI in the May stood at 97,043 lots as of this morning. There were 1,809 May EFS’s and 5,987 May EFP’s posted today. July/October traded from four under to 10 under and last at six under. Crude prices spiked overnight as Israel retaliated for Iran’s earlier drone and missile attack, but prices quickly retreated as it became clear that the strikes were limited in scope. Brent Crude rallied to $90.75 and WTI to $86.28 before retreating to $86.19 and $81.80 respectively. The Brazilian real strengthened back to the middle of the week’s range. The BRL was on track for a ~1.5 % loss on the week versus the US dollar, WTI Crude on track for a loss of ~3.0 % while Suar # 11 lost 3.5 % on the week.
Option watch: Sugar option volume was just 11,332 contracts consisting of 7,969 Calls and 3,363 Puts in an extremely quiet session. Volatility was relatively steady as futures saw the nearby May/July spread rally to close the week. Trades of note: 1,000 July 18.00 Puts vs 19.44 trade 32, 500 July 20.00/22.00 Call Spreads vs. 19.45 trade 46, 500 October 24.00 Calls vs. 19.80 trade 28, 1,500 July 20.50 Calls vs. 19.50 trade 47-51 and 400 October 20.50/18.50 Strangles trade 161.
ATM Vol’s:
June 19.75 Straddle 117 - vol 27.62, unch.
July 19.75 Straddle 174 - vol 27.82, +0.10 %
October 19.50 Straddle 247 - vol 25.32, unch.
March 19.75 Straddle 312 - vol 21.92, unch.
Option Open Interest: Calls 312,428 +4,246, Puts 214,286 +1,287 - total 526,714 +5,533
The USDA publishes numerous Global Agricultural Information Network (GAIN) reports covering sugar at this time of year. These are not official USDA statistics, but are filed by the USDA attaches posted in-country. Hyperlinks to the reports can be accessed below:
Australia Sugar Annual Brazil Sugar Annual
Colombia Sugar Annual Costa Rica Sugar Annual
Dom Rep Sugar Annual Ecuador Sugar Annual
Eswatini Sugar Annual EU Sugar Annual
Guatemala Sugar Annual Honduras Sugar Annual
India Sugar Annual Indonesia Sugar Annual
Jamaica Sugar Annual Mexico Sugar Annual
Nicaragua Sugar Annual Nigeria Sugar Annual
Peru Sugar Annual Philippine Sugar Annual
El Salvador Sugar Annual South Africa Sugar Annual
Venezuela Sugar Annual Zimbabwe Sugar Annual
This afternoon’s CFTC Commitments of Traders supplemental report showed a net spec short, excluding the index position, of 23,076 lots as of Tuesday’s close. The large specs were net short 10,552 lots after liquidating 9,804 lots and adding 27,609 new shorts while the small specs were net short 12,524 lots after liquidating 3,758 longs and adding 14,944 new shorts. The report showed the index funds adding 9,905 longs and covering 3,745 shorts to be net long 164,850 lots. The report showed a significant amount of short covering by the commercial sector – likely producers buying back short hedges on the dip. The futures-only report showed a net commercial short of 50,279 lots. The combined futures and options report showed the commercials net short of just 28,666 lots after adding 4.401 longs and covering 58,559 shorts – 62,960 lots, or ~3.2 million tonnes, less short than a week ago.
In the USMCA region: US futures were not traded today and settled unchanged across the board, with July at 38.95. The Mexican National Sugar Balance released by Conadesuca for the period October 1st-March 31st showed estimated production of 3.387 million tonnes (down 17 % from last year) and imports of 434,986 tonnes. Exports were estimated at 337,203 tonnes (down 42 %), virtually all to the US under the Suspension Agreements. IMMEX sales were estimated at 121,512 tonnes (down 38 %) and domestic deliveries were estimated at 2.123 million tonnes (up 1.67 %).
Regards,
JSG Commodities
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(203) 853 3000
JSG Indications:
Q2'24
Q3'24
Q4'24
Q1'25
Q2'25
Q3’25
Q4’25
Raws:
38.75
39.00
38.25
38.50
38.50
38.50
38.50
Mexican peso:
17.1208
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.