Jenkins Sugar Group Evening Report            ­­­­­­­                               

Friday October 21, 2011

World sugar futures finished the week on a soft note, with prices settling 32 lower in March at 26.48 and from 28 to 32 lower in the backs. Volume was light at 46,116 lots. Prices crept gradually higher through 9:30 a.m. in New York, peaking at 27.35, and then once again capitulated. Prices dropped gradually for two hours and then consolidated through the afternoon with a downwards bias. March bottomed at 26.33 after the settlement period and posted its lowest settlement since October 12^th. On spread, March/May narrowed from 89 to 77 over and last at 78 over. March/May finished last week at 107 over. May/July traded from narrowed from 98 to 88 over and last traded at 88. March settled 145 lower on the week.

Ten days of heavy rains have claimed over 100 lives across Central America and areas of El Salvador have had 60 inches of rain during the period. Flooding and damage to infrastructure have raised concerns about sugar crops in the region for a second year. Brazil’s Ag Ministry opined today that the 2012-13 crop might show some improvement over the current crop due to better yields. Canaplan stated today the yields in October could be one kilo of sugar per tonne of cane above September’s levels – 135.5 kilos versus 134.5 – as the benefits of the drier weather seen in September are felt. Canaplan estimated that 11 % to 12.5 % of the center-south crop will be replanted – that would be a slow start to a long, critical process. India may decide on whether to export sugar in a meeting to be held during the first week of November. India's Food Ministry determined that India will not export any food grains this year due to fears over food inflation and to comply with a food security law which is expected to be passed in December and guarantees affordable grains to a majority of India's population. Russia's First Deputy Prime Minister stated today that Russia will not import any sugar from abroad owing to a good domestic harvest and ample stocks.

This afternoon’s CFTC Commitment of Traders Report showed a net spec long position of 122,181 lots as of Tuesday’s close. The large specs were net long 112,024 lots and the small specs net long 10,157 lots. The combined futures and options report showed a net spec long of 139,166 lots – an increase of 29,646 lots on the week and an increase of 39,935 lots from the October 4^th report. The large specs were net long 131,493 lots, having added 17,611 new longs and covered 8,061 lots of shorts. The small specs were net long 7,673 lots after adding 5,421 new longs and 1,448 new shorts. The report provides an interesting snap shot as Tuesday was the last session when there were any lingering illusions that March might be able to master the resistance at 28.00. The supplemental report showed a net index fund long of 181,816 lots. The funds bought 625 new longs and added 2,708 lots.

In the NAFTA region: US futures prices settled five higher in January at 38.55 and from 22 higher to 38 lower in the other traded positions. Volume was again light. American Crystal reported today that as of Wednesday 81 % of its crop had been lifted and delivered to factories. Sub-freezing temperatures interrupted progress in the northern reaches of the beet area in the Red River Valley, and there is a further chance of cold weather tonight. American Crystal expects to process 9.2 million tonnes of beets in 2011. As of 2:30 p.m. this afternoon, entries under the refined TRQ were 46,363 tonnes based on customs data, though evidence at the dock suggests the customs data is lagging.

Regards,

Jenkins Sugar Group, Inc.

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Raws: “Fair value” #16 futures pre-close, or JSG estimate. US Refined: Sellers’ list price.

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.