Morning Sugar Report

Friday October 13, 2017

 

 

World sugar futures have traded just around unchanged for the majority of the morning in very low volume.  March has traded from 14.35 to 14.21 and last at 14.23, five lower.  May has traded from 14.44 to 14.32 and last at 14.34, unchanged. Fewer than 25,000 lots have traded between March and May to this point. On spread, the March/May has traded from nine to 12 under and last at 11 points discount.  The May/July has traded from 17 to 20 under and last at 19 points discount.    

 

In London, December is $3.10 lower at $372.50 trading from $377.70 to $372.40 to this point.   On spread, the December/March is $1.00 lower at $2.80 discount.  The December/March white premium is last $58.50.  

 

Sugar #11 OI update:

 

TOTAL: 696,309    +1,748

 

 

 

OPTION WATCH

 

ATM VOLS:

TRADES OF NOTE:

OPTIONS OI:

 

Today’s CFTC Commitment of Traders report incorporates a period where March traded from 14.57 down to 13.83 and back to 14.27. The VWAP for March #11 in the period was 14.15. We believe that the supplemental spec short position has gone from 106,220 lots to a position around 115,275 short. March open interest has gone from 426,613 to 429,071.  May open interest has gone from 119,588 to 125,432. Total open interest has gone from 685,353 to 694,059 lots. 

 

China's Agriculture Ministry said the country is expected to produce 10.47 million mt of sugar during the 2017-18 season (October-September), up 12.7% from 9.29 million mt produced in 2016-17, according to its October China Agricultural Supply and Demand Estimate report released Thursday. If China produces 10.47 million mt, it would be a three-year high and the most since 10.56 million mt was produced in the 2014-15 season. From the 10.47 million mt expected to be produced, 9.23 million mt of it would be from sugarcane, while the remaining 1.24 million mt would be produced from sugar beet. The country is expected to harvest 1.4782 million hectares of sugar in 2017-18. Over 86.7%, or 1.277 million hectares, of the total harvest would be sugarcane, while the remaining 13.3%, or 195,000 hectares, would be sugar beet. In 2016-17, China harvested 1.351 million hectares, with 87.6%, or 1.183 million hectares, of it being sugarcane. The remaining 12.4%, or 168,000 hectares, was suga r beet. The average sugar yield for the 2017-18 season remained at 56.25 mt/hectare, unchanged from the 2016-17 season. China is the fifth-largest sugar-producing country in the world, according to the US Department of Agriculture. China is expected to import 3.2 million mt of sugar during the 2017-18 season (October-September), up 36.2% from 2.35 million mt imported in 2016-17, the Chinese Agriculture Ministry said in its October China Agricultural Supply and Demand Estimate report published Thursday. China, the largest importer and third-largest sugar consuming country in the world, is estimated to consume 15 million mt of sugar in the 2017-18 season, flat from the 15 million mt consumed in 2016-17. Exports are forecast at 70,000 mt in 2017-18, down 41.7% from 120,000 mt exported in 2016-17. Despite the 10.47 million mt expected to be produced and 3.2 million mt forecast to be imported, China sugar supplies are projected to fall 1.4 million mt after this season, compared with a 3.48 million mt decrease after the 2016-17 season. Domestic sugar prices are expected to range between Yuan 6,400-Yuan 6,800/mt ($971.30-$1,032.01) during the 2017-18 season, compared with Yuan 6,570/mt in 2016-17, the ministry said.

 

Suedzucker reports that it expects to produce over 5.0 million tonnes of sugar this year – a 15 % increase in area and good weather over the summer, which allowed for a yield of roughly 79 tonnes of beets per hectare, account for the increase.

 

The USDA released updated S&D data for the US and Mexican sugar markets, showing an ending stocks/use ratio of 13.3 % for FY’18. A 90,000-ton reduction in the estimate of FY’18 Florida production was largely offset by an 84,000-ton increase in the Louisiana crop (20,000 tons in FY’17, 64,000 in FY’18). A full NAFTA sugar market update will be released today. 

 

JSG Commodities

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.

 

 

Jeff Dobrydney

JSG Commodities

16 S. Main Street

Norwalk, CT

203.853.3000 (office)

203.451.9639 (cell)

 

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