Jenkins Sugar Group Evening Report                                         

Tuesday June 8, 2010

World sugar futures rallied nicely today, moving above the 10- and 20-day moving averages and clearing the past week’s range, all of which encouraged short covering. Prices settled from 55 higher in July at 14.88 and from 41 higher in October to 20 higher in red March. The day’s 14.31 low was inked on the opening and the 15.03 high traded in the last 10 minutes of the session – prices ground gradually but steadily higher in between. On spread, the July/October tightened on the rally, narrowing from 35 to 19 under and last trading at 20 under. October/March traded from 108 to 95 under and last at 101 under. Technically, the July peaked one point shy of the May 28^th high at 15.04 and 10 points shy of the 40-day average at 15.13 – the 40-day average proved a rally killer in late May when the July peaked at or within a few points of the average on five consecutive days, so a move above the 4*0-day tomorrow will likely stimulate some meaningful short covering.

From Brazil, UNICA projected today that 56.71 % of the 2010-11 cane crop will be devoted to ethanol production and the balance 43.29 % will go to sugar production. Pakistan, according to a government statement, will not issue any more import tenders until August. 

According to JOB Economia, Brazil is exporting less sugar than expected to this point. In April-May, exports stood at 3.48 million tonnes, an increase of just one percent relative to the same period last harvest.  JOB had forecast exports to be about 10% higher than last year. Ethanol exports from April-May have totaled 128.4 million liters, compared with 559.1 million liters in the same period last harvest, down 77%. The state of Minas Gerais, Brazil’s second largest sugarcane producer, has produced around 379,000 metric tonnes of sugar so far this season, up 90 % compared to the same period last year. Cash premiums of Thai raw sugar for July-September shipment are currently quoted at 600-650 points over the July New York contract, compared with around 500 over a week ago. The TCP in Pakistan will resume imports only in August-September and it plans to contract for 375,000 tonnes of white sugar during that period.  It has bought 825,000 tonnes since February. According to the Indian Sugar Mills Association, white sugar production in 2010/11 is expected to exceed its consumption forecast of 23.5-24 million tonnes. They also revised their forecast for 2009/10 to 18.7 million tonnes, up from 18.5 million. Sugar production in Maharashtra is likely to increase by 18 % to 8.5 million metric tonnes in 2010/11, according to India’s Business Standard newspaper. Licht has forecast total production at 26 million tonnes for 2010/11.

In the NAFTA region: The July futures went out with a whimper, settling 74 lower at 31.95. At today’s expiry, CSC Sugars delivered 84 lots to Sucden. September settled eight higher at 32.00. Mexican sugar production through June 5^th has totaled 4.764 million tonnes, 3.81 % less than was produced by the same date in 2008-09. In the most recent week, 281,819 tonnes of cane was harvested, a shade more than double the amount seen last year, while sugar production was up 91.79 % over last year at 34.727 tonnes. TRQ imports in the most recent week were miniscule on balance. Total imports now stand at 902,962 lots.

Regards,

Jenkins Sugar Group, Inc.

(203) 563 6100

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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.