Thursday November 11, 2021


World sugar futures rebounded smartly today – March broke back above 20.00 with some momentum, clearing the double-top at 20.10 and posting the highest settlement since October 11th – the day that the recent high at 20.61 was installed. March settled 52 higher at 20.12, May 49 higher and the back months from 44 to 11 higher. Outright traded volume was 91,725 lots – strangely slightly lighter than the volume seen on Wednesday’s sell-off. On spread, March/May traded from 22 to 28 over and last at 26 over. May/July traded from 33 to 42 over and last at 41 over. While the Crude markets remained in consolidation mode, the Brazilian real was supportive to sugar today, rallying to 5.3885 to the dollar - the strongest the real has been against the dollar since October 4th .

Option watch: Option volume was 24,736 contracts consisting of 18,879 Calls and 5,857 Puts. Volatility found itself once again under pressure with paper selling 4,600 March 23.00 Calls laid up, though when the Call selling dried up and we broke through the double top in futures volatility buyers started to emerge. Trades of note: 1,399 March 21.50/January 20.50 Diagonal Call Spreads vs 20.10 trade 14, 4,600 March 23.00 Calls vs 20.00 trade 24-26, 632 March 20.50/21.00 Call Spreads trade 15-17, 500 October 16.50/March 19.00 Diagonal Put Spreads vs 19.73/18.90 trade -16, 250 March 18.50 Puts vs 19.88 trade 33, 250 May 21.00 Calls vs 19.80 trade 79, 250 May 24.00 Calls trade 29-31, 200 May 21.00/18.50 Fences vs 19.75 trade 20, 300 July 19.00 Puts vs 19.17 trade 123 and 250 July 21.00/24.00 Call spreads trade 47.

ATM Vol’s: December 20.00 Straddle 36-39 - vol 19.85, -.65 % January 20.00 Straddle 109-112 - vol 22.15, +1.0 % March 20.00 Straddle 195-199 - vol 23.90, +1.0 % May 19.75 straddle 239-244 - vol 23.15, +.85 % July 19.50 straddle 266-273 - vol 22.55, +.55 % Option Open Interest: Calls 377,347 -1,272, Puts 237,144 +1,301 - total 614,491 +29

According to Williams SA the Brazilian line-up of raw sugar vessel waiting to load is now 1.670 million tonnes of sugar, which compares with 1.66 million tonnes last week and 1.59 million tonnes last year. Approximately 175,000 tonnes of sugar shipped on the week. In October, CenterSouth mills sold a total of 2.14 billion liters of ethanol, a 29.81 % decrease compared to the same period of the 2020/2021 harvest. Of the total sold in the period, 67.15 million liters were destined for the foreign market and 2.07 billion liters were sold domestically. In the domestic market, sales of hydrous ethanol reached 1.23 billion liters, which represents a substantial reduction of 34.92 % over same period of the last harvest (1.89 billion liters). The quantity of anhydrous ethanol sold, in turn, showed a positive variation of 5.27 %, with 842.67 million liters sold in 2021 against 800.49 million liters in 2020. The director of UNICA explains that “producers' sales in the month of October reflect the readjustment of the fuel market in light of supply and price conditions. The Senate Committee on Economic Affairs (CAE) will be hearing the president of Petrobras and the Minister of Mines and Energy (MME) about the issue of fuel prices given that there are several pending bills on the matter. On November 9th, the MME defended Petrobras’ pricing policy, explaining that it was necessary to avoid a domestic fuel shortage. The country’s President, meanwhile, said that it would make more sense to break Petrobras into several companies to ensure that it doesn’t have a monopoly when, and if, it gets privatized.

In the USMCA region: US futures saw virtually all of the price cover below 37.00 in the FY’22 positions cleared out today. November’22 and the Q1’23 futures also rallied - all traded contracts excepting the spot January posted new life of contract highs today. Traded volume was 236 lots If the implications of Tuesday’s WASDE report weren’t sufficient to motivate the buyers, the 65- point improvement in #11 values from Wednesday’s low to today’s high (85 points higher thus far in November) likely dialed up anxiety levels. In Mexico, Sugar Chamber has asked the government to stop the sugar currently being imported duty-free from Guatemala as food preparation. It explained that mill sales dropped 4.0 % this year as a result, forcing mills to export more sugar to the world market at a loss.

Please take a moment to register for the JSG New Yok Sugar Conference. The event is scheduled for the afternoon of December 16th . To register, simply click here.

Regards,

JSG Commodities This email address is being protected from spambots. You need JavaScript enabled to view it. (203) 853 3000 JSG Indications: Q4'21 Q1'22 Q2'22 Q3'22 Q4'22 Q1'23 Raws: 38.00 37.25 37.00 37.00 35.00 32.65 Mexican peso: 20.6367 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.

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