Thursday April 25, 2024

World sugar futures erased most of the price improvement seen over the past week today. May eased 75 points to 19.25 – just eight points above the long-term low seen last week – before attempting a recovery. May retraced to 19.92, but renewed selling undermined the rally. May settled 52 lower at 19.48, July 61 lower at 19.16 and the back months from 57 to 12 lower. Outright traded volume was 172,947 lots. On spread, May/July traded from 20 to 37 over and last at 30 over. May OI stood at 58,093 lots prior to today’s activity, which included 11,927 lots of May EFP’s and 959 May EFS’s. Outright selling was concentrated in the second month ahead of Tuesday’s May expiry. July/October traded from four under to 10 under and last at nine under. October/March traded from 29 to 23 under and last at 24 under.

Option watch: Sugar option volume was 32,706 contracts consisting of 23,829 Calls and 8,877 Puts. Volatility found a little life on today’s activity. Trades of note: 500 July 21.00 Calls vs 19.30 trade 23, 500 July 19.50/20.50 1x2 Call Spreads trade -1/+3, 300 July 19.00 Puts vs 19.24 trade 64, 300 July 19.00 Puts vs 19.12 trade 71, 2,500 October 23.00/25.00 Call Spreads trade 13, 2,350 October 24.00/26.00 Call Spreads vs 19.50 trade 7, 2,000 October 22.00/24.50 Call Spreads vs July 21.00 Puts vs 19.42/19.37 trade 160, 500 October 20.50 Calls vs 19.12 trade 67, 500 October 18.00 Puts vs 19.10 trade 70, 500 October 17.25 Puts vs 19.28 trade 42-43, 400 October 19.00 Puts vs 19.20 trade 109 and 2,000 March 17.25 Puts vs 19.28 trade 36.

ATM Vol’s:

June 19.25 Straddle 92 - vol 24.90, +1.8 %
July 19.25 Straddle 152 - vol 25.75, +1.5 %
October 19.25 Straddle 236 - vol 24.50, +.50 %
March 19.50 Straddle 298 - vol 21.25, unchanged

Option Open Interest: Calls 318,639 +1,370, Puts 218,547 +312 - total 537,186 +1,682

A report from Conab estimated planted area in Brazil at 8.673 million hectares for 2024-25, up from 8.334 million hectares last year. This seemed to catch the attention of the market (perhaps with the help of some headline-scraping ‘bots) despite that fact that the report estimated cane production to be down 3.8 %. Sugar production was estimated 1.3 % higher at 46.292 million tonnes. Conab is often an outlier and typically does not draw the type of reaction apparently seen today.

In the USMCA region: US futures were sold off today as the world sugar market swooned to within a few points of their long-term lows, draws #16 sellers off the sidelines. Volume was 520 lots, with activity extending out to the Q3’25 positions, which traded down to 37.50. When the dust had cleared, July settled 40 lower at 38.10, September 49 lower at 38.00 and the other active positions from 27 to 100 lower.

From the “nice element of a terrible story” department, American Sugar Refining Inc. has announced that it is shipping sugar to its Baltimore refinery through alternate channels following the collapse of the Francis Scott Key Bridge last month. The Domino Sugar refinery in Baltimore has operated without interruption, Marianne Martinez, a company spokesperson, said Thursday. The company, which had six to eight weeks of supplies at the time of the bridge’s collapse, has also since “identified alternative ways to receive raw sugar shipments.” Bloomberg reports that a “full-size vessel” delivered raw sugar from Florida to the refinery on Wednesday via a new 20-foot channel, and another full-size vessel is due this weekend. At left is an image of the Barge Jonathan, which typically ferries raw sugar from Florida to ASR’s Atlantic Range refineries, transiting the channel.

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:
38.00
38.00
38.00
38.00
37.50
37.500
37.50
Mexican peso:
17.1945
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.