Jenkins Sugar Group Evening Report                        

US refined prices raised to $53-$55 per cwt

Thursday January 21, 2010

World sugar futures turned in another volatile session today – March covered a 114 point range from 71 higher to 43 lower and shed 45 points following the official settlement. Prices finished the afternoon 30 lower in March at 28.81 and from 20 to eight lower in the deferred months after settling officially from 15 higher in March to 29 higher in October. Volume was 164,450 lots – the highest mark achieved in a long while. Prices appreciated through the overnight period, but March initially stalled at Wednesday’s 29.45 high and then at 29.50. Once 29.50 was mastered, process spiked up to 29.82, but selling thickened considerably as the market approached the mythical 30.00 level, and the rally stalled and then failed. Prices chopped gradually lower through the morning, bottoming at 28.73 prior to noon. An 84 point rebound was followed by a 60 point sell off and several subsequent 40 to 60 point swings as the market lurched into the close. On spread, the March/May narrowed from 145 over to 112 over and last traded at 115 over. May/July traded out to 386 over, narrowed to 340 and last traded at 354 over.

The Brazilian line-up declined by 99,503 tonnes to 605,191 tonnes and included a new nomination of 51,650 tonnes to India. This line-up is 180,000 tonnes lower than the line-up at this time last year. The Indonesian tender today to buy 181,000 tonnes of whites was cancelled due to insufficient interest and has been rescheduled for January 26^th. Indian sugar stocks on January 1^st were 5 million tonnes, 54.5 % lower than last year but, up from 2.4 million tonnes of stocks held on December 1^st. Today the Chinese government sold 356,500 tonnes of state reserves into their domestic market. The average price of 4,798 yuan was below the prevailing domestic price of about 5,000 yuan. The government has now released 852,300 tonnes to the domestic market during the current crop. China sugar production in December was 11.2 % higher than last year but total production for 2009 was 8.5% lower at 13.23 million tonnes. Chinese sugar imports in 2009 were 1.06 million tonnes, some 36.5% higher than in 2008. Despite the histrionics seen, when the dust cleared the March had posted a higher high, higher low and a higher settlement. We would not rule out some additional backing and filling, but do not view the action as disruptive to the overall bullish trend.

In the NAFTA region: US futures prices finished mixed today, from 38 higher in May at 41.88 to 55 lower in September. Most of the day’s volume traded in May at 41.50. May traded for a few lots at 600 over September, and September traded at 350 over November. The day brought the latest (and greatest) in the long series of refined price increased. United Sugars raised their list price from 48.00 to 53.00 FOB RRV while Imperial Sugar Company raised its price from 49.00 to 55.00 FOB refinery. As of this afternoon, Domino Sugar had not moved from 48.00. One year ago, prices stood at 35.00. In Mexico, in an exclusive interview with SIA’s Luis Soto, the director of FEESA, said that the government’s priority is to guarantee supply to the domestic market, and the government mills will export no more than 50,000 tonnes from the new crop, less than 20 % of the amount the government sent north last year.

Regards,

Jenkins Sugar Group, Inc.

(203) 563 6100

This email address is being protected from spambots. You need JavaScript enabled to view it.