Wednesday April 24, 2024

World sugar futures finished with modest gains in tact for a fifth consecutive session, netting 68 points cumulatively during the period to settle at 20.00 basis May - nine higher on the day. May had settled lower for nine consecutive session prior to the current winning streak, losing 304 points – having fallen out the window, the market is now plodding back up the stairs. July settled 11 higher at 19.77 while the back months settled from 10 higher to one lower. Outright traded volume was 93,610 lots. May OI stood at 65,476 lots prior to today’s activity – 2,475 lots higher than last year’s May OI at the same point in time. There were 14,423 lots of May EFP’s posted today and just over 13,000 lots of May/July spreads/TAS. May/July traded from 22 to 30 over and last at 25 over. July/October traded from two under to five under and last at four under while October/Mach traded from 24 to 21 under and last at 22 under.
Option watch: Sugar option volume was 11,693 contracts consisting of 7,223 Calls and 4,470 Puts. Volatility on the front of the board is eroding quickly. Paper did buy 1,000 May’25 Calls laid up. Trades of note: 500 June 22.50 Calls trade 2, 600 July 20.00 Puts trade 90, 558 July 19.50 Puts vs 19.56 trade 70-72, 300 July 21.75 Calls vs 19.74 trade 18, 750 October 19.75/24.00 1x2 Fences vs 19.71 trade 76, 750 October 23.00/16.50 Fences vs 19.75 trade 12-13, 400 October 23.50 Calls trade 26 and 1,000 May’25 19.50 Calls vs 19.30 trade 138-140.

ATM Vol’s:

June 19.75 Straddle 88 - vol 22.70, -3.0 %
July 19.75 Straddle 146 - vol 23.90, -1.75 %
October 19.75 Straddle 234 - vol 23.55, -.65 %
March 20.00 Straddle 299 - vol 20.65, unchanged
Option Open Interest: Calls 317,269 +1,470, Puts 218,235 +382 - total 535,504 +1,852

Reuters reports that India has agreed to allowing the diversion an extra 800,000 metric tons of sugar for biofuel production, a government source said on Wednesday. Concerns over sugar production due to below normal monsoon rains between June and September had led the government to cap the amount that could be diverted for ethanol in the current season at 1.7 million tonnes. According to a survey by S&P Global Insights, Brazil center-south production is forecast to be off to a robust start, with 689,300 tonnes produced in the first half April. If achieved this forecast would be 27 % higher than the first of April 2023. "Robust figures are anticipated for the first half of April, with around 200 mills in operation," said S&P sugar analyst Bianca Guimaraes. UNICA is anticipated to release the first production results for the new 2024/25 center-south harvest early tomorrow. S&P’s survey indicated 15.92 million tonnes of sugarcane was crushed in the period, up 14.9 % on the year. Ethanol production is seen at 931.3 million liters, up 18.8 % on the year.

In the USMCA region: US futures saw just five lots trade today, all in the spot July at 38.50. July settled 45 lower at 38.50 and the balance of the board settled unchanged. As noted above, world sugar values are retracing higher at a very measured pace after collapsing at the beginning of the month, and US futures still appear overvalued by at least some measures.

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:
38.25
38.50
38.25
38.50
38.50
38.50
38.50
Mexican peso:
17.0777
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.