Friday December 17, 2021

World sugar futures finished the week in retreat. March tested as low at 19.01 before settling 29 lower at 19.11. May settled 32 lower and the back months from 37 to four lower. Outright traded volume was 60,023 lots. On spread, March/May traded from 34 to 41 over and last at 40 over. May/July traded 25 to 33 over and last at 32 over. On a risk-off day, The Bloomberg Commodity Index was down 0.8 %. WTI Crude was down by 3.44 % to $69.89 by mid-morning in New York. March #11 lost 60 points on the week.

Option watch: Option volume was 10,409 contracts consisting of 6,361 Calls and 4,048 Puts. Volatility held until impacted by some late Straddle selling in February and March. Trades of note: 175 February 19.00 Straddles trade 87-88, 205 March 19.00 Straddles trade 132-134, 750 March 22.00 Calls trade 9-10, 625 March 21.00/18.00 Fences vs 19.05 trade 4, 550 March 20.00/18.00 Fences vs 19.14 trade 18, 500 March 24.00 Calls trade 3, 600 October 17.00 Puts vs 18.45 trade 65, 600 October 21.00/16.50 Strangles trade 111 and 240 October 20.50/17.25 Strangles trade 148.

ATM Vol’s: February 19.00 Straddle 86-88 - vol 18.95, -.80 % March 19.00 Straddle 132-135 - vol 21.40, -.50 % May 18.75 Straddle 186-189 - vol 21.70, -.10 % July 18.50 Straddle 223-226 - vol 21.65, unchanged Option Open Interest: Calls 338,470 +1,824, Puts 236,230 +1,787 - total 574,700 +3,611

Brazil’s center-south mills processed 3.87 million tonnes of cane in the second-half of November, down by 55.59 % on the year, according to UNICA. Sugar output was down 62.78 % at 160,000 metric tonnes while ethanol output was down 39.62 % at 359 million liters. Some 1.05 billion liters of hydrous were sold in the domestic market in November, down 36.56 % on year, compared to a 4.34 % growth in anhydrous sales which reached 856.99 million liters. The accumulated crush so far reached 520.9 million tonnes. UNICA said the region should process a total of 525 million tonnes of cane this year, down 13.3 % on the year, with sugar output dropping to 32.0 million tonnes from 38.5 million tonnes, and ethanol production dropping 8.7 % to 27.7 billion liters. The cost of producing cane in in Brazil 2021/22 increased by 23 % on year due to higher input costs and more expensive leases, according to IDEA. It expects production costs to increase further in 2022/23.

This afternoon’s CFTC Commitment of Traders supplemental report showed a net spec long position, exclusive of the index holdings, of 164,700 lots as of Tuesday’s close. The specs added 13,562 new longs and covered 16,046 shorts to be net long 127,537 lots while the small specs added 3,766 new longs and covered 1,144 shorts to be net long 37,163 lots. The report showed and net index fund long of 182,412 lots – the funds added 6,308 longs and added 8,183 new shorts on the week. The futures-only report showed a net commercial short of 251,878 lots and the combined futures and options report showed a net commercial short of 249,377 lots after the commercials liquidated 3,132 longs and added 33,270 shorts on the week.

In the USMCA region: US futures settled 34 lower in March at 36.40, 11 lower in May, unchanged in the Q3’22 positions and 38 higher across the FY’23 months. May saw 96 lots trade between 36.90 and 36.80 and November traded lightly at 36.15. March #16 lost 75 points this week basis settlement, while the #11 futures lost 60 points. Mexican sugar production in the week ended December 11th totaled 169,872 tonnes of sugar from 1.768 tonnes of cane. Total production from the crop as of the 11th stood at 408,501 tonnes, down 6.4 % from last year. The amount of cane crushed was 4.401 million tonnes, down 5.46 % from last year. The combined yield thus far has averaged 7.67 tonnes of sugar per hectare, up from 7.63 tonnes last year and the 7.36 estimated for the crop.

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: 37.00 36.50 37.00 37.25 36.25 33.30 Mexican peso: 20.8228 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.