Jenkins Sugar Group Morning Report

Wednesday November 9, 2011

REGISTER for our 3^rd annual World Sugar and NAFTA Seminar – Dec. 15^th (see below)

http://events.constantcontact.com/register/event?llr=4iovq4hab&oeidk=a07e56eg37l5b95cc09

World sugar futures been pressured lower by greater forces this morning, centered in Italy, as commodities are off to a weak start as the dollar surges.  March is now 24 ticks lower at 25.67, having traded from 26.03 down to 25.45.  May has traded from 25.32 down to 24.79 and last 22 points lower at 25.01.  More than 20,000 contracts have traded between March and May to this point – an improvement from recent sessions.  On spread, the March/May has traded from 74 into 65 over and last at 67 points premium.  The May/July has traded from 62 down to 52 over and last at 54 points premium.  

Cash-wise, its reported Thai values have eased a bit, with February buyers now at 80 points premium over March, where the last trade was at 95 over.  Offers for March deliverable sugar Thais remain thin, with buyers reportedly in the 65-70 points premium area.   In Central America, March deliverable Guats are reportedly 30 points premium bid over March.  

As we mentioned last evening, JOB Economia estimates that Brazilian center-south sugar exports in the November-March period will be 2.0 million tonnes lower than the same period last year. Unica forecasts that Brazil will import 1.1-1.4 billion liters of ethanol to supply domestic demand. They are optimistic that Brazil will not need to import ethanol by 2012/13. They state that the center south needs to double cane production by 2020/21 to meet world sugar and domestic ethanol demands and this will require an investment of $45 billion. The industry notes that sugar exports will be about 2.0 million tonnes lower than last year in November/April as in addition to a smaller crop the millers will hold sugar for the local market. According to government sources sugar exports in April/October were 1.4 million tonnes lower than last year at 16.2 million tonnes. Unica notes that 30% of the center south mills will be completed by mid-November. There are about 350 sugar mills in the center south.

China’s refined sugar output in October rose 36% from a year earlier to 214,000 metric tonnes.  Total output in the January-October period is 4.5% higher from the same period last year to 8.39 million tonnes. 

Russia has refined 2.9 million tonnes of white sugar from beets from the start of the season in August to November 7^th, up 41% from the same time period a year ago. 

Best Regards,

Jeff Dobrydney

Jenkins Sugar Group

203.563.6100

www.jenkinssugar.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.