MORNING SUGAR REPORT

Friday May 3, 2024 

World sugar futures have worked a bit higher this morning,
as the Dollar gives back some recent strength and the
Brazilian currency responds. July #11 is last 16 points higher
at 19.40, trading from 19.18 to 19.52 as of 10:00AM EST.
October is last 16 points higher at 19.28. More than 30,000
lots have traded between July and October to this point. On
spread, the July/October has traded from four under to two
over and last at two points premium. The October/March has
traded from 24 to 28 under and last at 26 points discount.
SUGAR #11 OPEN INTEREST:
 N4: 366,753 +2,730
 V4: 185,535 +1,109
 H5: 113,744 +246
TOTAL: 812,058
OPTION WATCH:
June 19.50 straddle 75 vol 25.35 -2.8%
July 19.50 straddle 143 vol 25.95 -1.5%
Oct. 19.50 straddle 233 vol 24.57 -1.1%
March 19.75 straddle 302 vol 21.60 -.60%
Trades of note:
2,200 July 16.00 puts trade 5-6 (paper sells)
1,000 n 21.25/21.50 cs trade 3
650 h 19.75 calls vs 19.65 trade 145
MACRO BYTE
April’s weaker-than- expected nonfarm-payrolls
print, together with a higher unemployment rate,
suggest monetary policy is finally asserting
itself on the labor market after a long lag. That
could
reinforce Fed Chair Jerome Powell’s recent
dovishness, as he and
his colleagues emphasize their full-employment
mandate when deciding on the rate path for the
rest of 2024.
Our baseline is for the unemployment rate to
climb to 4.5% at year-end — but if the Fed were
to cut rates in July and September, we think the
unemployment rate could peak at 4.0% in the
next few months, then decline. April’s payrolls
report
boosts the odds of a Fed cut in July.
* Headline nonfarm payrolls increased by 175k
in April (vs. an upwardly revised 315k in
March), lower than our estimate of 200k
and the consensus estimate of 240k. The twomonth
net revision
was -22k.
*
Hiring was concentrated in cyclical sectors —
like health care — and sectors that were
depressed over the past year, such
as transportation and warehousing. Local
government, one of the most PR cyclical
sectors, saw a sharp decline in hiring, from
51k prior to zero.
The household survey was weaker, with
employment eking out a 25k increase (vs. 498k
prior). Adjusted to match the definition
of nonfarm payrolls – which means including
holders of multiple jobs and excluding
employment in private households, among other
things – the gain was 563k (vs. 352k prior).
The number of full-time jobs increased 949k
following four
months of decline.
LONDON #5
In London, the August is last $5.60 higher at $576.10 trading from $568.70 to $576.80 to this
point. The August/October spread is last $1.00 higher at $25.00 premium. The August/July
premium is last at $147.00, up $8.00 over the last two days.
CFTC COMMITMENT OF TRADERS PREVIEW
Today’s CFTC Commitment of Traders report incorporates a period where July #11 traded
from 19.25 up to 20.23 and back to 19.58, and the market saw the May 2024 contract expire with
a large delivery. In this most recent period, we believe that the supplemental spec position in
Sugar #11 has gone from a 34,450-lot short to 49,500 lots short. July open interest has gone from
341,431 to 360,790. October open interest has gone from 180,165 to 182,593. Total open interest
has gone from 831,294 to 833,794 lots.
GLOBAL FUNDAMENTALS
Taiwan has tendered to buy 34,000-38,000 metric tonnes of sugar for September 1 – October
31, 2024 arrival, max 99.49 pol and Louis Dreyfus Company was awarded the transaction.
News service reports indicate that thousands of railway workers in Canada at Canadian
National Railway and Canadian Pacific Kansas City have voted overwhelmingly to strike as
early as May 22, the union said on Wednesday. Contracts covering locomotive engineers,
conductors and yard workers at CN and CPKC expired on Dec. 31, 2023, and Teamsters Canada
Rail Conference is re-negotiating a third agreement covering CPKC rail traffic controllers. The
three worker groups, numbering 9,300 workers, each voted over 95 % to authorize a strike. The
parties remain far apart and now begin a mandatory 21-day period of federal mediation.
Conadesuca has released a Mexican sugar crop progress update through April 27th (Week
30) showing total production from the crop to date of 4.170 million tonnes tel quel. Week 30
production was 178,790 tonnes, 5.5 % lower than last year. Area harvested during the week was
6.5 % lower at 29,341 hectares. As of the report date eight of the 48 mills active this campaign
had finished grinding compared to 12 of 48 mills last year. Total production of sugar with
polarization of less than 99.2 degrees for shipment to the US under the Suspension Agreements
stands at 279,923 tonnes compared to 638,036 tonnes last year.
CURRENCY UPDATE (YTD CHANGE):
 USD: 104.88 +4.35%
 BRL: 5.0701 -4.29%
 INR: 83.435 -0.13%
 MXN: 17.106 -0.78%
Best Regards,
Jeff Dobrydney
Senior Vice President
Head of Futures & Options
JSG Commodities
This email address is being protected from spambots. You need JavaScript enabled to view it.
203.853.3000
www.jsgcom.com
This report has been compiled for general informational purposes only. While every effort has been made to ensure accuracy, Jenkins
Sugar Group, Inc. assumes no responsibility for errors and omissions.