@sdelsad/commodity-desk-daily 1.0.43 → 1.0.44
This diff represents the content of publicly available package versions that have been released to one of the supported registries. The information contained in this diff is provided for informational purposes only and reflects changes between package versions as they appear in their respective public registries.
- package/ep14.html +720 -0
- package/ep14.md +217 -0
- package/ep14.script.txt +97 -0
- package/ep14_chart1.png +0 -0
- package/ep14_chart2.png +0 -0
- package/ep14_chart3.png +0 -0
- package/feed.xml +5 -2
- package/package.json +2 -2
- package/ep07.html +0 -744
- package/ep11.html +0 -754
package/ep14.html
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<!DOCTYPE html>
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<html lang="en" data-theme="light">
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<head>
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<meta charset="utf-8">
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<meta name="viewport" content="width=device-width, initial-scale=1">
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<title>Ep 14 — Sugar: Two Contracts, the Switch and the Refiner · Soft Commodity Trading</title>
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<meta name="description" content="Sugar is quoted twice, one refining step apart, and the gap between the two screens is what the market pays for refining. Then Brazil's mills, where supply is a daily decision between food and fuel, and ethanol parity is the price at which that decision flips.">
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<meta name="author" content="Sébastien Delsad">
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<link rel="canonical" href="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep14.html">
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<meta property="og:type" content="article">
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<meta property="og:site_name" content="Soft Commodity Trading">
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<meta property="og:title" content="Ep 14 — Sugar: Two Contracts, the Switch and the Refiner">
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<meta property="og:description" content="Sugar is quoted twice, one refining step apart, and the gap between the two screens is what the market pays for refining. Then Brazil's mills, where supply is a daily decision between food and fuel, and ethanol parity is the price at which that decision flips.">
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<meta property="og:url" content="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep14.html">
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<meta property="og:image" content="https://cdn.jsdelivr.net/npm/@sdelsad/commodity-desk-daily@1.0.15/cover.jpg">
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<meta property="og:image:alt" content="Soft Commodity Trading cover art">
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<meta property="og:audio" content="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep14.mp3">
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<meta property="og:audio:type" content="audio/mpeg">
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<meta property="article:published_time" content="2026-08-31">
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<meta name="twitter:card" content="summary_large_image">
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<meta name="twitter:title" content="Ep 14 — Sugar: Two Contracts, the Switch and the Refiner">
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<meta name="twitter:description" content="Sugar is quoted twice, one refining step apart, and the gap between the two screens is what the market pays for refining. Then Brazil's mills, where supply is a daily decision between food and fuel, and ethanol parity is the price at which that decision flips.">
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<meta name="twitter:image" content="https://cdn.jsdelivr.net/npm/@sdelsad/commodity-desk-daily@1.0.15/cover.jpg">
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<link rel="alternate" type="application/rss+xml" title="Soft Commodity Trading" href="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/feed.xml">
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{
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"@type": "PodcastEpisode",
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"url": "https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep14.html",
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"name": "Ep 14 — Sugar: Two Contracts, the Switch and the Refiner",
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"episodeNumber": 14,
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"duration": "PT13M11S",
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"description": "Sugar is quoted twice, one refining step apart, and the gap between the two screens is what the market pays for refining. Then Brazil's mills, where supply is a daily decision between food and fuel, and ethanol parity is the price at which that decision flips.",
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"author": {
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"@type": "Person",
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"name": "Sébastien Delsad"
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"datePublished": "2026-08-31"
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}
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</script>
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<style>
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:root{
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--ink:#16110c; --ink-soft:#4a4238; --line:#e3ddd2; --paper:#faf7f1;
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--accent:#1d4032; --gold:#a8813c; --spoiler:#8a2f2f;
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--tint:rgba(128,110,70,.07); --tint-2:rgba(128,110,70,.045);
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--up:#215c44; --down:#8a2f2f; --shadow:rgba(22,17,12,.14);
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--up:#7fae95; --down:#d98a8a; --shadow:rgba(0,0,0,.55);
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color-scheme:dark;
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}
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*{box-sizing:border-box}
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html{scroll-behavior:smooth;scroll-padding-top:64px}
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html,body{transition:background-color .25s ease,color .25s ease}
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text-rendering:optimizeLegibility}
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white-space:nowrap}
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/* ---------- reading progress ---------- */
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/* ---------- masthead ---------- */
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header{padding:52px 0 30px}
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max-width:34em;text-wrap:pretty}
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letter-spacing:.05em;text-transform:uppercase}
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/* ---------- listen ---------- */
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.listen{margin-top:26px;border:1px solid var(--line);border-radius:12px;
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background:var(--tint-2);padding:16px 18px 14px}
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audio{width:100%;height:38px;display:block}
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.listenrow{display:flex;flex-wrap:wrap;gap:8px 16px;align-items:center;
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margin-top:12px;font:12.5px/1 var(--sans);color:var(--ink-soft)}
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/* ---------- contents ---------- */
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/* ---------- body ---------- */
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background:
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/* ---------- quiz and solutions ---------- */
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border-radius:99px;padding:6px 14px;cursor:pointer;
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transition:all .2s}
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summary::-webkit-details-marker{display:none}
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padding:2px 0 2px 20px;font-size:17.5px}
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/* ---------- glossary ---------- */
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<a href="https://storage.googleapis.com/podcast-audio-2647223968/index.html">Soft Commodity Trading</a>
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<span class="epno">Ep 14</span>
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<h1>Sugar: Two Contracts, the Switch and the Refiner</h1>
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<p class="dek">Sugar is quoted twice, one refining step apart, and the gap between the two screens is what the market pays for refining. Then Brazil's mills, where supply is a daily decision between food and fuel, and ethanol parity is the price at which that decision flips.</p>
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<div class="meta">Monday 31 August 2026 · <b>13 min 11</b></div>
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<a href="https://storage.googleapis.com/podcast-audio-2647223968/commodity-desk-daily/ep14.mp3" download>Download</a>
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<nav class="toc" id="toc" aria-label="Contents"><p class="tochead">Contents</p><ol><li class="t2"><a href="#solutions">Solutions</a></li><li class="t2"><a href="#two-screens-one-commodity">Two screens, one commodity</a></li><li class="t2"><a href="#brazil-prices-a-decision-not-a-crop">Brazil prices a decision, not a crop</a></li><li class="t2"><a href="#ethanol-parity-and-what-it-means-when-it-is-far">Ethanol parity, and what it means when it is far away</a></li><li class="t2"><a href="#two-demand-curves">Two demand curves</a></li><li class="t2"><a href="#the-refiner-s-margin-and-the-trap-inside-it">The refiner's margin, and the trap inside it</a></li><li class="t2"><a href="#where-the-two-halves-meet">Where the two halves meet</a></li><li class="t2"><a href="#glossary">Glossary</a></li></ol></nav>
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<h1>Market pulse</h1>
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<p><strong>Sugar gave back three and a half percent on Friday after a month in which it rose twenty-one, and the grains went the other way — Chicago wheat closed at a three-year high.</strong></p>
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<div class="tablewrap" tabindex="0" role="region" aria-label="Table, scrolls sideways"><table><thead><tr><th>Market</th><th>Contract</th><th>Price</th><th class="num">Change</th></tr></thead><tbody><tr><td>Raw sugar No. 11 (ICE)</td><td>Oct 26</td><td>17.56 c/lb</td><td class="num"><span class="mv down">−0.63c / −3.5%</span></td></tr><tr><td>White sugar No. 5 (ICE London)</td><td>Oct 26</td><td>$520.30/t</td><td class="num"><span class="mv down">−$8.50 / −1.6%</span></td></tr><tr><td>Chicago wheat</td><td>Sep 26</td><td>767.00 c/bu</td><td class="num"><span class="mv up">+24¼c / +3.3%</span></td></tr><tr><td>Soybeans (CBOT)</td><td>Sep 26</td><td>1276.25 c/bu</td><td class="num"><span class="mv up">+19¾c / +1.6%</span></td></tr><tr><td>Soybean meal</td><td>Sep 26</td><td>$338.20/t</td><td class="num"><span class="mv up">+$8.00 / +2.4%</span></td></tr><tr><td>Corn (CBOT)</td><td>Sep 26</td><td>512.00 c/bu</td><td class="num"><span class="mv up">+1¾c / +0.3%</span></td></tr></tbody></table></div>
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<p>Friday's sugar break reads as long liquidation into a weekend rather than a change of story. The move that matters is the one behind it: raws printed a fourteen-month high on 18 August and are still around twenty-one percent higher on the month. Three supply lines moved the same way at once. Brazil's Center-South made 3.903 million tonnes of sugar in June, down 26.3% year on year. Thailand's 2026/27 crop is forecast at 9.5 million tonnes, down 15.6%. EU and UK output is put at 14.98 million tonnes, the lowest in eleven years. The analyst community has flipped 2026/27 from surplus to deficit — the ISO now has −262,000 t, Green Pool −3.2 Mt, StoneX −1.7 Mt.</p>
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<p>At 17.56 cents the screen sits about two cents above the roughly 15.7 c/lb FOB cost of production for Brazilian raws. That is a market paying a real incentive, not a market at cost.</p>
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<p>The grain complex ignored all of it. Wheat led on Black Sea export risk, beans followed the meal, and corn barely moved as a fast US harvest capped it.</p>
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<figure class="chartfig">
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<figcaption class="charttitle">Grains bid, sugar sold</figcaption>
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<svg class="chart" viewBox="0 0 640 330" width="100%" preserveAspectRatio="xMidYMid meet" xmlns="http://www.w3.org/2000/svg" role="img">
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<style>.chart{--c-a:var(--accent,#1d4032);--c-b:var(--gold,#a8813c);--c-c:#4a6f8c;font-family:inherit}html[data-theme="dark"] .chart{--c-c:#7ba3c4}.chart .grid{stroke:var(--line,#ddd6c9);stroke-width:1}.chart .axis{fill:var(--ink-soft,#4a4238);font-size:12px}.chart .unit{fill:var(--ink-soft,#4a4238);font-size:11px;letter-spacing:.06em;text-transform:uppercase}.chart .ln{fill:none;stroke-width:2.25;stroke-linejoin:round;stroke-linecap:round}.chart .lg{fill:var(--ink,#16110c);font-size:12.5px}.chart .vlabel{fill:var(--ink,#16110c);font-size:11.5px;font-weight:600}@media (max-width:900px){.chart .axis{font-size:14px}.chart .unit{font-size:13px}.chart .lg{font-size:14.5px}.chart .vlabel{font-size:13.5px}.chart .ln{stroke-width:2.6}}@media (max-width:640px){.chart .axis{font-size:16px}.chart .unit{font-size:14px}.chart .lg{font-size:16px}.chart .vlabel{font-size:15px}.chart .ln{stroke-width:3.1}}</style>
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<line class="grid" x1="56" y1="286.0" x2="622" y2="286.0" opacity=".45"/>
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<text class="axis" x="46" y="290.0" text-anchor="end">-4</text>
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<line class="grid" x1="56" y1="221.0" x2="622" y2="221.0" opacity=".45"/>
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<text class="axis" x="46" y="225.0" text-anchor="end">-2</text>
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<line class="grid" x1="56" y1="156.0" x2="622" y2="156.0"/>
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<text class="axis" x="46" y="160.0" text-anchor="end">0</text>
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<line class="grid" x1="56" y1="91.0" x2="622" y2="91.0" opacity=".45"/>
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<text class="axis" x="46" y="95.0" text-anchor="end">2</text>
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<line class="grid" x1="56" y1="26.0" x2="622" y2="26.0" opacity=".45"/>
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<text class="axis" x="46" y="30.0" text-anchor="end">4</text>
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<text class="unit" x="622" y="16" text-anchor="end">% change, Friday 28 August 2026</text>
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437
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<text class="axis" x="103.2" y="306" text-anchor="middle">Chi wheat</text>
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438
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<text class="axis" x="197.5" y="306" text-anchor="middle">Meal</text>
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439
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<text class="axis" x="291.8" y="306" text-anchor="middle">Beans</text>
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440
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<text class="axis" x="386.2" y="306" text-anchor="middle">Corn</text>
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441
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<text class="axis" x="480.5" y="306" text-anchor="middle">Whites</text>
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<text class="axis" x="574.8" y="306" text-anchor="middle">Raws</text>
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<rect x="82.9" y="50.1" width="40.5" height="105.9" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="177.3" y="77.3" width="40.5" height="78.7" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="271.6" y="105.0" width="40.5" height="51.0" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="365.9" y="145.0" width="40.5" height="11.0" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="460.3" y="156.0" width="40.5" height="52.3" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="554.6" y="156.0" width="40.5" height="112.4" rx="2" fill="var(--c-a)" opacity=".85"/>
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<line class="grid" x1="56" y1="156.0" x2="622" y2="156.0"/>
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</svg>
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<figcaption class="chartcap">On the same session the two complexes traded opposite stories: wheat priced an export threat, sugar priced a long book being trimmed before a weekend. <span class="chartsrc">CBOT and ICE settlements, Friday 28 August 2026</span></figcaption>
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</figure>
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453
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+
<p><strong>The policy read: India turns a tariff off.</strong> India is the world's largest sugar consumer, and this month it opened a duty-free import window of one million tonnes running to 31 October against a standing 100% duty. The mechanism, not the headline, is the trade. A cut domestic crop, a monsoon running 13% below normal through 26 August, and retail sugar moving from 48 rupees a kilo in July to about 55 in August give a government little choice: food inflation gets the tariff switched off. The instant it is, the largest consumer stops being an occasional exporter and becomes a buyer, which moves the world balance sheet in both directions from one administrative decision. The caution is that a permission is not a purchase — one forecaster expects no more than 500,000 t to actually clear by the deadline.</p>
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454
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+
<h1>Key takeaways</h1>
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455
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<ul><li>Sugar is quoted twice, one refining step apart: raws in cents per pound in New York, whites in dollars per tonne in London. The bridge is 22.05, and getting it wrong is a factor-of-twenty-two error.</li><li>The gap between the two screens is the white premium, and it is the market's price for the act of refining.</li><li>Center-South Brazil is the only origin at scale that can decide, daily, whether its crop becomes food or fuel. That makes its supply a decision rather than a harvest.</li><li>ATR is the unit that makes the decision computable, because it is the raw material for both products and the basis on which growers are paid.</li><li>Ethanol parity is the sugar price at which a mill is indifferent. Below it, mills make fuel; above it, they make sugar.</li><li>When sugar trades far above parity, the switch has already been used. A further rally pulls no additional tonnes out of Brazil and can only ration demand.</li><li>Sugar has two demand curves, food and fuel, and the fuel curve is a floor rather than a source of demand growth.</li><li>The floor moves with things that are not sugar: the blending mandate, crude, and the Brazilian real.</li><li>A refiner is not long sugar. He is long the spread between two contracts and short his own cost stack.</li><li>His break-even white premium rises with the raw price, because the refining loss is a percentage of what he buys and not a fee.</li></ul>
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456
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+
<h1>Vocabulary</h1>
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+
<div class="tablewrap" tabindex="0" role="region" aria-label="Table, scrolls sideways"><table><thead><tr><th>Term</th><th>What it means</th></tr></thead><tbody><tr><td><strong>No. 11</strong></td><td>The ICE raw cane sugar futures contract, 112,000 lb quoted in US cents per pound, FOB at origin, and the world price of raw sugar</td></tr><tr><td><strong>No. 5</strong></td><td>The ICE London white sugar futures contract, 50 tonnes quoted in US dollars per tonne, delivered, and the world price of refined sugar</td></tr><tr><td><strong>long ton</strong></td><td>2,240 lb, the imperial weight unit the sugar No. 11 contract is still sized in at 50 long tons a lot</td></tr><tr><td><strong>raws</strong></td><td>Raw cane sugar, the crystalline product a cane mill exports before refining, traded at 96 degrees polarisation</td></tr><tr><td><strong>VHP</strong></td><td>Very high polarisation raw sugar, around 99 degrees, the grade Brazil exports and which trades at a premium to the No. 11 screen</td></tr><tr><td><strong>polarisation (pol)</strong></td><td>The sucrose purity of a sugar measured by the rotation of polarised light, expressed in degrees, and the basis on which raw sugar is priced and settled</td></tr><tr><td><strong>ICUMSA</strong></td><td>The colour scale for refined sugar, lower being whiter, with the No. 5 contract requiring 45 ICUMSA or better</td></tr><tr><td><strong>white premium</strong></td><td>The price of the London white contract less the New York raw contract converted to the same unit, which is what the market pays for refining</td></tr><tr><td><strong>ATR</strong></td><td>Açúcar Total Recuperável, total recoverable sugar, the kilos of sugar recoverable from a tonne of cane and the unit in which Brazilian growers are paid and mills compare products</td></tr><tr><td><strong>sugar mix</strong></td><td>The share of a mill's recoverable sugars turned into sugar rather than ethanol, bounded above by the plant's crystallisation capacity</td></tr><tr><td><strong>hydrous ethanol</strong></td><td>Roughly 95 percent ethanol sold directly at the pump for flex-fuel cars in Brazil, taking 1.6913 kg of ATR per litre</td></tr><tr><td><strong>anhydrous ethanol</strong></td><td>Near-water-free ethanol blended into petrol under a mandate, taking 1.7651 kg of ATR per litre</td></tr><tr><td><strong>ethanol parity</strong></td><td>The sugar price at which a mill earns the same per unit of ATR from sugar as from ethanol, and the level at which its production decision flips</td></tr><tr><td><strong>Center-South</strong></td><td>The Brazilian sugarcane region running from São Paulo through Minas Gerais and Goiás, about 90 percent of the national crop and the world's swing supplier</td></tr><tr><td><strong>destination refinery</strong></td><td>A standalone refinery at the consuming end that buys raws on the water and sells whites locally, earning the white premium less its costs rather than a crop margin</td></tr><tr><td><strong>melt loss</strong></td><td>The sugar lost between raws in and whites out, roughly six percent, which makes a refiner's break-even premium a function of the raw price</td></tr><tr><td><strong>toll refining</strong></td><td>Refining someone else's raws for a fee per tonne, which converts the white premium from a trading position into a fixed margin</td></tr></tbody></table></div>
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458
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+
<h1>Quiz</h1>
|
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459
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+
<p id="q1" class="qq"><strong>Q1.</strong> A Center-South mill will crush 3.6 million tonnes of cane this season at 138 kg of ATR per tonne of cane. Its board is deciding the sugar mix. Raw sugar is at 16.20 c/lb and the São Paulo hydrous ethanol indicator is at $0.4100 a litre. Use the industry factors: 1.0495 kg of ATR per kg of sugar, 1.6913 kg of ATR per litre of hydrous. Compute the ethanol parity price in cents per pound, then the extra revenue the mill earns by moving five percentage points of its mix from ethanol to sugar — and state the one reason that figure overstates what actually lands in the accounts.</p>
|
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460
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+
<p id="q2" class="qq"><strong>Q2.</strong> October whites settle at $520.30 a tonne. A destination refiner needs 1.06 tonnes of raws for each tonne of white he sells, and his refining cost is $70 a tonne of white. If raw sugar rallied to 20.00 c/lb, what white premium would he need to break even?</p>
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461
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+
<p id="q3" class="qq"><strong>Q3.</strong> <em>(Ep 13)</em> An exporter sells 15 lots of arabica price-to-be-fixed against December, buyer's call. December was 302.00 when the contract was signed and is 342.00 today, with the buyer still unfixed. Compute the exporter's mark-to-market credit exposure to that buyer.</p>
|
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462
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+
<p id="q4" class="qq"><strong>Q4.</strong> <em>(Ep 11)</em> In the middle of harvest week, a terminal elevator with no funding problem posts a corn bid fifteen cents under the board when every neighbouring bid is five under. Say what that bid is doing.</p>
|
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463
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+
<p><strong>Conversion drill.</strong> A Handysize parcel of 28,500 t of corn is being offered. Convert it to bushels using the mental method.</p>
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464
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+
<h2 id="solutions">Solutions<a class="anchor" href="#solutions" aria-label="Link to this section">#</a></h2><p class="secnote">One reveal per question — check your answer to Q1 without spoiling the rest.</p><div class="solnbar"><button type="button" class="ghost" data-solnall="open">Reveal all</button><button type="button" class="ghost" data-solnall="close">Hide all</button></div>
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<details class="soln" id="a1"><summary><span class="qn">Q1</span><span class="sl">Reveal the answer</span></summary><div class="solnbody"><p>The mill is not choosing a price. It is choosing which product to make out of a fixed pool of recoverable sugars, so every comparison has to be made per tonne of ATR.</p>
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+
<p><em>Step one — the pool.</em> 3.6 million tonnes of cane at 138 kg of ATR per tonne gives 496,800 tonnes of ATR for the season.</p>
|
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467
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+
<p><em>Step two — what one tonne of ATR is worth each way.</em></p>
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468
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+
<div class="tablewrap" tabindex="0" role="region" aria-label="Table, scrolls sideways"><table><thead><tr><th></th><th>Factor</th><th class="num">Output per t of ATR</th><th class="num">Price</th><th>Revenue</th></tr></thead><tbody><tr><td>Sugar</td><td>1.0495 kg ATR per kg</td><td class="num">952.8 kg</td><td class="num">$357.15/t</td><td><strong>$340.30</strong></td></tr><tr><td>Hydrous ethanol</td><td>1.6913 kg ATR per litre</td><td class="num">591.3 L</td><td class="num">$0.4100/L</td><td><strong>$242.42</strong></td></tr></tbody></table></div>
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469
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+
<p>The sugar price comes from the screen: 16.20 c/lb × 22.0462 = $357.15 a tonne. Sugar beats ethanol by <strong>$97.88 per tonne of ATR</strong>, about 40 percent.</p>
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470
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+
<p><em>Step three — ethanol parity.</em> Run the ethanol number backwards to find the sugar price that would make the mill indifferent. Ethanol earns $0.4100 ÷ 1.6913 = $0.2424 per kg of ATR. One kg of ATR yields 0.9528 kg of sugar. So parity is $0.2424 ÷ 0.9528 = $0.2544 per kg, which is <strong>$254.42 a tonne, or 11.54 c/lb</strong>. The screen at 16.20 is 4.66 cents above parity.</p>
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471
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+
<p><em>Step four — the five points.</em> Five percentage points of 496,800 t of ATR is 24,840 t of ATR. At $97.88 a tonne of ATR, that is <strong>about $2.43 million</strong> of extra revenue for the season.</p>
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472
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+
<p><em>The trap.</em> The two prices are not measured at the same place. The ethanol indicator is a mill-gate price. The No. 11 screen is FOB the port, so the sugar route still has to pay road freight from the interior, port elevation and terminal costs before it reaches the mill gate — several tens of dollars a tonne of sugar, which eats a visible slice of the $97.88. The gap survives that deduction comfortably at these prices, which is the real answer, but a board paper that quotes $2.43 million without netting logistics is quoting a gross number as if it were a margin.</p>
|
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473
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+
<p>Two second-order points worth having. The mix is bounded by crystallisation capacity, so "move five points" is an engineering question before it is an economic one — a mill already at its ceiling cannot take the trade at any price. And the moment the mill sells more sugar it takes on price risk it did not have, because ethanol is sold domestically in reais while sugar is sold in dollars.</p>
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474
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+
<p class="backq"><a href="#q1">↑ Back to question 1</a></p></div></details>
|
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475
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+
<details class="soln" id="a2"><summary><span class="qn">Q2</span><span class="sl">Reveal the answer</span></summary><div class="solnbody"><p>One step, and the step is the loss factor.</p>
|
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476
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+
<p>20.00 c/lb × 22.0462 = $440.92 a tonne of raws. He buys 1.06 tonnes for every tonne he sells, so his raw cost is $467.38. Add $70 of refining and he needs $537.38 for the white. The white premium he needs is therefore $537.38 − $440.92 = <strong>$96.46 a tonne</strong>.</p>
|
|
477
|
+
<p>The quick route is the same arithmetic in one line: the premium has to cover the six percent he loses plus the fee, so 0.06 × $440.92 + $70 = $96.46.</p>
|
|
478
|
+
<p>What the question is testing is that the break-even premium is not a constant. At Friday's 17.56 c/lb the same refiner breaks even at $93.23. At 12 c/lb he breaks even at $85.87. Every cent the raw market rallies raises his break-even, because the melt loss is a percentage of what he buys and the refining fee is not. A refiner who watches the premium in dollars alone believes a bull market is making him money, when part of the widening is simply keeping him whole.</p>
|
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479
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+
<p class="backq"><a href="#q2">↑ Back to question 2</a></p></div></details>
|
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480
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+
<details class="soln" id="a3"><summary><span class="qn">Q3</span><span class="sl">Reveal the answer</span></summary><div class="solnbody"><p>15 lots of arabica is 15 × 37,500 lb = 562,500 lb. The market has moved 342.00 − 302.00 = 40.00 cents in the buyer's favour since the contract was signed. At 40 cents on 562,500 lb, the buyer is sitting on an unrealised gain of <strong>$225,000</strong>, and that is exactly the exporter's mark-to-market credit exposure.</p>
|
|
481
|
+
<p>The reason it is credit and not market risk is that the exporter is fully hedged on price. He sold futures against the sale, and whenever the buyer fixes, the futures leg and the physical leg offset. What he is exposed to is the buyer choosing not to fix at all — walking away from a contract that is now $225,000 in the money to the exporter's disadvantage, or failing altogether. The buyer has posted nothing against that gain. The exposure grows with every cent the market rallies, and no market move can reduce it to zero.</p>
|
|
482
|
+
<p class="backq"><a href="#q3">↑ Back to question 3</a></p></div></details>
|
|
483
|
+
<details class="soln" id="a4"><summary><span class="qn">Q4</span><span class="sl">Reveal the answer</span></summary><div class="solnbody"><p>The bid is not a price. It is a refusal.</p>
|
|
484
|
+
<p>An elevator that is ten cents worse than its neighbours in harvest week, with money available, is not making a statement about the value of corn. It is managing a queue. Its binding constraint is space, not capital: once the bins are full, the next truck through the gate has nowhere to go, and taking that corn means either turning it away later or piling it on the ground at a cost. So the bid drops until the trucks go elsewhere.</p>
|
|
485
|
+
<p>Two consequences follow. First, the posted bid stops carrying information about the basis and starts carrying information about capacity, so reading it as a market signal is a mistake. Second, the elevator that still has space in that week owns the bottleneck and can set replacement value for everyone around it. That is the whole reason merchants rent ships and own elevators.</p>
|
|
486
|
+
<p><strong>Drill answer.</strong> 28,500 t of corn.</p>
|
|
487
|
+
<p>Mental method: multiply by 40 and shave 1.5 percent. 28,500 × 40 = 1,140,000. One and a half percent of that is 17,100. So 1,140,000 − 17,100 = <strong>1,122,900 bushels</strong>.</p>
|
|
488
|
+
<p>Exact: 28,500 t × 39.368 = 1,121,988 bu, so the mental route is 0.08 percent high. At 5,000 bushels to a Chicago lot, that parcel is about <strong>224 lots</strong> — worth checking, because a Handysize corn cargo hedged as 228 lots is four lots of naked length nobody put on deliberately.</p>
|
|
489
|
+
<h1>The written edition</h1>
|
|
490
|
+
<p class="backq"><a href="#q4">↑ Back to question 4</a></p></div></details><h2 id="two-screens-one-commodity">Two screens, one commodity<a class="anchor" href="#two-screens-one-commodity" aria-label="Link to this section">#</a></h2>
|
|
491
|
+
<p>Sugar is quoted twice, and the two quotes are not in the same language.</p>
|
|
492
|
+
<p><strong>No. 11</strong> is the ICE raw sugar contract in New York. It prices raw cane sugar free on board at origin and it is the world price of the raw commodity. It is quoted in US cents per pound. A lot is 112,000 lb, which is 50 long tons, and the tick is one hundredth of a cent — a point, in the softs convention — worth $11.20.</p>
|
|
493
|
+
<p><strong>No. 5</strong> is the ICE white sugar contract in London. It prices refined sugar, delivered, in US dollars per tonne, with 50 tonnes to a lot.</p>
|
|
494
|
+
<p>One commodity, one refining step apart, quoted in two different units. The bridge is the tonne itself: 2,204.6 lb, so cents per pound multiplied by 22.0462 gives dollars per tonne. Friday's 17.56 c/lb is $387.13 a tonne. London settled at $520.30. The difference, <strong>$133.17 a tonne</strong>, is the white premium, and it is what the market pays for the act of refining.</p>
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495
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+
<h2 id="brazil-prices-a-decision-not-a-crop">Brazil prices a decision, not a crop<a class="anchor" href="#brazil-prices-a-decision-not-a-crop" aria-label="Link to this section">#</a></h2>
|
|
496
|
+
<p>Center-South Brazil is the swing supplier of the world sugar market, and its mills have something no other origin has at scale: a choice.</p>
|
|
497
|
+
<p>A cane mill crushes cane, extracts the recoverable sugars, and then sends those sugars down one of two pipes. Crystal sugar for export, or ethanol for the pump. The choice is made continuously through the season, and the plant is built to do both.</p>
|
|
498
|
+
<p>The unit that makes it computable is <strong>ATR</strong> — <em>Açúcar Total Recuperável</em>, total recoverable sugar. ATR measures the kilos of sugar that could in principle be recovered from a tonne of cane. It is neither sugar nor ethanol; it is the feedstock for both, and it is the basis on which Brazilian growers are paid, which is why the entire industry speaks in it.</p>
|
|
499
|
+
<p>The conversion factors are industry standard:</p>
|
|
500
|
+
<div class="tablewrap" tabindex="0" role="region" aria-label="Table, scrolls sideways"><table><thead><tr><th>Product</th><th class="num">ATR required</th></tr></thead><tbody><tr><td>1 kg of sugar</td><td class="num">1.0495 kg</td></tr><tr><td>1 litre of hydrous ethanol</td><td class="num">1.6913 kg</td></tr><tr><td>1 litre of anhydrous ethanol</td><td class="num">1.7651 kg</td></tr></tbody></table></div>
|
|
501
|
+
<p>Take one tonne of ATR and run it both ways at Friday's prices.</p>
|
|
502
|
+
<div class="tablewrap" tabindex="0" role="region" aria-label="Table, scrolls sideways"><table><thead><tr><th>Route</th><th class="num">Output</th><th class="num">Price</th><th>Revenue</th></tr></thead><tbody><tr><td>Sugar</td><td class="num">952.8 kg</td><td class="num">$387.13/t</td><td><strong>$368.87</strong></td></tr><tr><td>Hydrous ethanol</td><td class="num">591.3 L</td><td class="num">$0.4476/L</td><td><strong>$264.65</strong></td></tr><tr><td>Anhydrous ethanol</td><td class="num">566.5 L</td><td class="num">$0.5043/L</td><td><strong>$285.71</strong></td></tr></tbody></table></div>
|
|
503
|
+
<p>Sugar wins by $104.22 a tonne of ATR against hydrous — about 40 percent.</p>
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504
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+
<figure class="chartfig">
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505
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+
<figcaption class="charttitle">One tonne of ATR, three destinations</figcaption>
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+
<svg class="chart" viewBox="0 0 640 330" width="100%" preserveAspectRatio="xMidYMid meet" xmlns="http://www.w3.org/2000/svg" role="img">
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507
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+
<style>.chart{--c-a:var(--accent,#1d4032);--c-b:var(--gold,#a8813c);--c-c:#4a6f8c;font-family:inherit}html[data-theme="dark"] .chart{--c-c:#7ba3c4}.chart .grid{stroke:var(--line,#ddd6c9);stroke-width:1}.chart .axis{fill:var(--ink-soft,#4a4238);font-size:12px}.chart .unit{fill:var(--ink-soft,#4a4238);font-size:11px;letter-spacing:.06em;text-transform:uppercase}.chart .ln{fill:none;stroke-width:2.25;stroke-linejoin:round;stroke-linecap:round}.chart .lg{fill:var(--ink,#16110c);font-size:12.5px}.chart .vlabel{fill:var(--ink,#16110c);font-size:11.5px;font-weight:600}@media (max-width:900px){.chart .axis{font-size:14px}.chart .unit{font-size:13px}.chart .lg{font-size:14.5px}.chart .vlabel{font-size:13.5px}.chart .ln{stroke-width:2.6}}@media (max-width:640px){.chart .axis{font-size:16px}.chart .unit{font-size:14px}.chart .lg{font-size:16px}.chart .vlabel{font-size:15px}.chart .ln{stroke-width:3.1}}</style>
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+
<line class="grid" x1="56" y1="286.0" x2="622" y2="286.0"/>
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+
<text class="axis" x="46" y="290.0" text-anchor="end">0</text>
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+
<line class="grid" x1="56" y1="221.0" x2="622" y2="221.0" opacity=".45"/>
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511
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+
<text class="axis" x="46" y="225.0" text-anchor="end">100</text>
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512
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+
<line class="grid" x1="56" y1="156.0" x2="622" y2="156.0" opacity=".45"/>
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513
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<text class="axis" x="46" y="160.0" text-anchor="end">200</text>
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514
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+
<line class="grid" x1="56" y1="91.0" x2="622" y2="91.0" opacity=".45"/>
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515
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+
<text class="axis" x="46" y="95.0" text-anchor="end">300</text>
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516
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+
<line class="grid" x1="56" y1="26.0" x2="622" y2="26.0" opacity=".45"/>
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517
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+
<text class="axis" x="46" y="30.0" text-anchor="end">400</text>
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518
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+
<text class="unit" x="622" y="16" text-anchor="end">US$ per tonne of ATR</text>
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519
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+
<text class="axis" x="150.3" y="306" text-anchor="middle">Sugar</text>
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520
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+
<text class="axis" x="339.0" y="306" text-anchor="middle">Anhydrous</text>
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521
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+
<text class="axis" x="527.7" y="306" text-anchor="middle">Hydrous</text>
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+
<rect x="130.1" y="46.2" width="40.5" height="239.8" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="318.8" y="100.3" width="40.5" height="185.7" rx="2" fill="var(--c-a)" opacity=".85"/>
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<rect x="507.4" y="114.0" width="40.5" height="172.0" rx="2" fill="var(--c-a)" opacity=".85"/>
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<line class="grid" x1="56" y1="286.0" x2="622" y2="286.0"/>
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</svg>
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527
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<figcaption class="chartcap">At Friday's prices the sugar route earns forty percent more per unit of recoverable sugar than hydrous ethanol. That gap, not the sugar price itself, is what sets Brazil's export supply. <span class="chartsrc">Computed from ICE No. 11 October settlement 17.56 c/lb and CEPEA/ESALQ São Paulo ethanol indicators, 28 August 2026, using CONSECANA conversion factors</span></figcaption>
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528
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+
</figure>
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529
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+
<h2 id="ethanol-parity-and-what-it-means-when-it-is-far">Ethanol parity, and what it means when it is far away<a class="anchor" href="#ethanol-parity-and-what-it-means-when-it-is-far" aria-label="Link to this section">#</a></h2>
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530
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+
<p>Run the ethanol number backwards and you get the figure a desk actually quotes: <strong>ethanol parity</strong>, the sugar price at which the mill is indifferent between the two pipes.</p>
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531
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+
<p>Hydrous earns $0.4476 ÷ 1.6913 = $0.2647 per kg of ATR. One kg of ATR makes 0.9528 kg of sugar. So parity is $0.2647 ÷ 0.9528 = $0.2778 per kg, or <strong>$277.75 a tonne — 12.60 c/lb</strong>. On anhydrous it is 13.60.</p>
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532
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+
<p>The screen was 17.56. Sugar is nearly five cents above parity, which in tonnes is $109 of headroom.</p>
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533
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+
<p>That headroom is not free money. Everything between the mill gate and the ship's rail has to fit inside it: truck freight from the interior, port elevation, terminal costs. But it fits comfortably, and that is the point. It is why Center-South mills have been running their sugar mix at the top of their engineering limit — above half the crop — for two seasons.</p>
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534
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+
<p>Here is how the question gets asked on a desk:</p>
|
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535
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+
<blockquote><strong>TRADER:</strong> Where's parity?<br><strong>ANALYST:</strong> Twelve sixty on hydrous. Thirteen sixty on anhydrous.<br><strong>TRADER:</strong> So they're maxed.<br><strong>ANALYST:</strong> Maxed since April. There's nothing left to switch.</blockquote>
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536
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+
<p>Notice what that exchange settles. Nobody asked where sugar was going. The question was whether Brazil has any switching left in it — and the answer determines what a rally can do. When sugar trades far above parity, the mills have already converted everything they can convert. The switch is spent. A rally from there pulls no additional tonnes out of Brazil; all it can do is ration demand. That is a structurally different market from one where a rally brings supply forward.</p>
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537
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+
<h2 id="two-demand-curves">Two demand curves<a class="anchor" href="#two-demand-curves" aria-label="Link to this section">#</a></h2>
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538
|
+
<p>This is what makes sugar odd. It has two demand curves.</p>
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539
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+
<p>Food demand is inelastic and grows roughly with population. Fuel demand is not about sugar at all — it is about petrol prices, blending policy and the Brazilian real.</p>
|
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540
|
+
<p>The fuel curve does not usually add much growth. What it does is put a <strong>floor</strong> under the price. If sugar falls to parity, the mill stops making sugar. Supply does not taper politely; it switches, at a level you can compute in advance.</p>
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541
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+
<p>And the floor moves. Brazil lifted its mandatory anhydrous blend to 32%. Crude has rallied. The São Paulo hydrous indicator was up 2.85% last week and anhydrous 2.35%. Each of those raises the floor under sugar without a single tonne of sugar changing hands — which is why a sugar analyst spends half their time on energy.</p>
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542
|
+
<h2 id="the-refiner-s-margin-and-the-trap-inside-it">The refiner's margin, and the trap inside it<a class="anchor" href="#the-refiner-s-margin-and-the-trap-inside-it" aria-label="Link to this section">#</a></h2>
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543
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+
<p>Back to the white premium: $133.17 a tonne on Friday.</p>
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544
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+
<p>A refiner buys raws, melts them, strips out the colour and the molasses film, and sells whites. He is not long sugar. He is long the spread between two contracts and short his own cost stack.</p>
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545
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+
<p>He also cannot make a tonne of white from a tonne of raws. Raws are 96 degrees polarisation; the No. 5 contract wants 45 ICUMSA and near-total purity. Add process losses and call it <strong>1.06 tonnes of raws for one tonne of white</strong>.</p>
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546
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+
<figure class="chartfig">
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547
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+
<figcaption class="charttitle">A refiner's margin, Friday's screens</figcaption>
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548
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+
<svg class="chart" viewBox="0 0 640 330" width="100%" preserveAspectRatio="xMidYMid meet" xmlns="http://www.w3.org/2000/svg" role="img">
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<style>.chart{--c-a:var(--accent,#1d4032);--c-b:var(--gold,#a8813c);--c-c:#4a6f8c;font-family:inherit}html[data-theme="dark"] .chart{--c-c:#7ba3c4}.chart .grid{stroke:var(--line,#ddd6c9);stroke-width:1}.chart .axis{fill:var(--ink-soft,#4a4238);font-size:12px}.chart .unit{fill:var(--ink-soft,#4a4238);font-size:11px;letter-spacing:.06em;text-transform:uppercase}.chart .ln{fill:none;stroke-width:2.25;stroke-linejoin:round;stroke-linecap:round}.chart .lg{fill:var(--ink,#16110c);font-size:12.5px}.chart .vlabel{fill:var(--ink,#16110c);font-size:11.5px;font-weight:600}@media (max-width:900px){.chart .axis{font-size:14px}.chart .unit{font-size:13px}.chart .lg{font-size:14.5px}.chart .vlabel{font-size:13.5px}.chart .ln{stroke-width:2.6}}@media (max-width:640px){.chart .axis{font-size:16px}.chart .unit{font-size:14px}.chart .lg{font-size:16px}.chart .vlabel{font-size:15px}.chart .ln{stroke-width:3.1}}</style>
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<line class="grid" x1="56" y1="286.0" x2="622" y2="286.0"/>
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551
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+
<text class="axis" x="46" y="290.0" text-anchor="end">0</text>
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552
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+
<line class="grid" x1="56" y1="199.3" x2="622" y2="199.3" opacity=".45"/>
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+
<text class="axis" x="46" y="203.3" text-anchor="end">200</text>
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554
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+
<line class="grid" x1="56" y1="112.7" x2="622" y2="112.7" opacity=".45"/>
|
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555
|
+
<text class="axis" x="46" y="116.7" text-anchor="end">400</text>
|
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556
|
+
<line class="grid" x1="56" y1="26.0" x2="622" y2="26.0" opacity=".45"/>
|
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557
|
+
<text class="axis" x="46" y="30.0" text-anchor="end">600</text>
|
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558
|
+
<text class="unit" x="622" y="16" text-anchor="end">US$ per tonne of white sugar</text>
|
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559
|
+
<text class="axis" x="126.8" y="306" text-anchor="middle">White sold</text>
|
|
560
|
+
<text class="axis" x="268.2" y="306" text-anchor="middle">Raws (1.06 t)</text>
|
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561
|
+
<text class="axis" x="409.8" y="306" text-anchor="middle">Refining cost</text>
|
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562
|
+
<text class="axis" x="551.2" y="306" text-anchor="middle">Margin</text>
|
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563
|
+
<rect x="89.8" y="60.5" width="74.0" height="225.5" rx="2" fill="var(--c-a)" opacity=".92"/>
|
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564
|
+
<text class="vlabel" x="126.8" y="53.5" text-anchor="middle">520</text>
|
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565
|
+
<line class="grid" x1="163.8" y1="60.5" x2="231.2" y2="60.5" stroke-dasharray="3 3" opacity=".5"/>
|
|
566
|
+
<rect x="231.2" y="60.5" width="74.0" height="177.8" rx="2" fill="#8a3b2f" opacity=".78"/>
|
|
567
|
+
<text class="vlabel" x="268.2" y="53.5" text-anchor="middle">-410</text>
|
|
568
|
+
<line class="grid" x1="305.2" y1="238.4" x2="372.8" y2="238.4" stroke-dasharray="3 3" opacity=".5"/>
|
|
569
|
+
<rect x="372.8" y="238.4" width="74.0" height="30.3" rx="2" fill="#8a3b2f" opacity=".78"/>
|
|
570
|
+
<text class="vlabel" x="409.8" y="231.4" text-anchor="middle">-70</text>
|
|
571
|
+
<line class="grid" x1="446.8" y1="268.7" x2="514.2" y2="268.7" stroke-dasharray="3 3" opacity=".5"/>
|
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572
|
+
<rect x="514.2" y="268.7" width="74.0" height="17.3" rx="2" fill="var(--c-b)" opacity=".92"/>
|
|
573
|
+
<text class="vlabel" x="551.2" y="261.7" text-anchor="middle">39.9</text>
|
|
574
|
+
</svg>
|
|
575
|
+
<figcaption class="chartcap">The whole business is the white premium less the melt loss and the fee. Forty dollars a tonne is what survives — and the loss line grows every time raws rally. <span class="chartsrc">Worked example, episode 14, using ICE No. 11 and No. 5 October settlements of 28 August 2026 and an assumed $70/t refining cost</span></figcaption>
|
|
576
|
+
</figure>
|
|
577
|
+
<p>Now the part people get wrong.</p>
|
|
578
|
+
<p>His break-even white premium is <strong>not a constant</strong>. The six percent he loses in the melt is a percentage of the raw price, not a fee. At Friday's raws that loss costs $23.23, so he breaks even at a premium of $93.23. If raws were at 12 c/lb the same loss would cost $15.87 and break-even would be $85.87.</p>
|
|
579
|
+
<p>So when raws rally, the white premium has to widen just to leave the refiner exactly where he was. A refiner who watches the premium in dollars rather than against the raw price will believe he is earning more on the way up and discover he is not.</p>
|
|
580
|
+
<p>That is the second reason a white premium blows out in a bull market. The first is that everybody wants refined sugar at once, and refining capacity is fixed in the short run. The second is arithmetic.</p>
|
|
581
|
+
<h2 id="where-the-two-halves-meet">Where the two halves meet<a class="anchor" href="#where-the-two-halves-meet" aria-label="Link to this section">#</a></h2>
|
|
582
|
+
<p>The India window and the Brazilian switch are the same story told from opposite ends.</p>
|
|
583
|
+
<p>India turning off a 100% duty adds demand that no crop created. Brazil, already at its mix ceiling, cannot answer it with more sugar. When a market's swing supplier has spent its flexibility, incremental demand has to be rationed by price rather than met by supply — and the rationing shows up first in the white premium, because the consuming end wants refined sugar, not raws.</p>
|
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584
|
+
<section class="glossec"><h2 id="glossary">Glossary<a class="anchor" href="#glossary" aria-label="Link to this section">#</a></h2><p class="secnote">Every unit, convention and desk expression the show had introduced by episode 14. Nothing said in the audio should ever be unrecoverable.</p><details class="gloss"><summary>Open the glossary<span class="sl">234 terms</span></summary><div class="glossbody"><label class="gsearch"><span class="vh">Search the glossary</span><input type="search" id="gfilter" placeholder="Search terms…" autocomplete="off"></label><div class="gchips" role="group" aria-label="Filter by episode"><button type="button" class="gchip on" data-gep="all">All<span class="gn">234</span></button><button type="button" class="gchip" data-gep="1">Ep 1<span class="gn">37</span></button><button type="button" class="gchip" data-gep="2">Ep 2<span class="gn">15</span></button><button type="button" class="gchip" data-gep="3">Ep 3<span class="gn">11</span></button><button type="button" class="gchip" data-gep="4">Ep 4<span class="gn">13</span></button><button type="button" class="gchip" data-gep="5">Ep 5<span class="gn">12</span></button><button type="button" class="gchip" data-gep="6">Ep 6<span class="gn">13</span></button><button type="button" class="gchip" data-gep="7">Ep 7<span class="gn">14</span></button><button type="button" class="gchip" data-gep="8">Ep 8<span class="gn">16</span></button><button type="button" class="gchip" data-gep="9">Ep 9<span class="gn">18</span></button><button type="button" class="gchip" data-gep="10">Ep 10<span class="gn">18</span></button><button type="button" class="gchip" data-gep="11">Ep 11<span class="gn">18</span></button><button type="button" class="gchip" data-gep="12">Ep 12<span class="gn">15</span></button><button type="button" class="gchip" data-gep="13">Ep 13<span class="gn">17</span></button><button type="button" class="gchip" data-gep="14">Ep 14<span class="gn">17</span></button></div><dl id="glist"><div class="gterm" data-ep="8"><dt>45Z</dt><dd>the US clean fuel production credit, one of the two policy levers that sets American soybean oil demand <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="6"><dt>abandonment</dt><dd>planted area never harvested for grain, lost to drought, flood or a switch to silage <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="2"><dt>ABCD</dt><dd>the four historic majors, Archer Daniels Midland, Bunge, Cargill and Louis Dreyfus <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="14"><dt>anhydrous ethanol</dt><dd>near-water-free ethanol blended into petrol under a mandate, taking 1.7651 kg of ATR per litre <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="12"><dt>arabica</dt><dd>the high-altitude coffee species, aromatic and acidic, lower-yielding and more fragile, priced on ICE in New York <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="2"><dt>arb</dt><dd>the full economics of moving a cargo, buy price plus freight and costs against the sale <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="11"><dt>arb window</dt><dd>the period during which a route's economics work, opening and shutting on freight, differentials and FX rather than on flat price <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="2"><dt>asset-heavy</dt><dd>owning the physical chain, which converts a volatile trading margin into a steadier toll <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="2"><dt>asset-light</dt><dd>renting elevators, terminals and plants rather than owning them <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="1"><dt>at</dt><dd>the small word that introduces the offer side (462 bid, at 462 and a half) <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="14"><dt>ATR</dt><dd>Acucar Total Recuperavel or total recoverable sugar, the kilos of sugar recoverable from a tonne of cane, the unit in which Brazilian growers are paid and the unit in which a mill compares sugar against ethanol <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="9"><dt>B50</dt><dd>a blending mandate requiring 50 percent biodiesel in the diesel pool, the level Indonesia moved to in 2026 <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="1"><dt>bag (coffee)</dt><dd>60 kg, how the coffee trade counts volume <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="7"><dt>balance sheet</dt><dd>the one-page supply and demand statement for one crop and one marketing year, built so that supply minus use equals ending stocks and the page closes <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="10"><dt>Baltic Dry Index (BDI)</dt><dd>the Baltic Exchange headline dry bulk freight index, a weighted composite of the Capesize, Panamax, Supramax and Handysize route assessments <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="1"><dt>bid</dt><dd>the price a buyer will pay <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="4"><dt>bill of lading</dt><dd>receipt, contract of carriage and document of title in one, whoever holds it owns the cargo <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="9"><dt>biomass-based diesel</dt><dd>the RFS category covering biodiesel and renewable diesel made from fats and vegetable oils <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="9"><dt>blend wall</dt><dd>the physical or warranty limit on how much conventional biodiesel an engine or fuel system will tolerate <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="11"><dt>blending</dt><dd>combining lots of different quality so the weighted average meets a contract specification, creating value from material nobody else can use <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="8"><dt>board crush</dt><dd>the processing margin implied purely by futures prices, meal price times 0.022 plus oil price times 0.11 minus the bean price, in dollars per bushel <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="11"><dt>bottleneck asset</dt><dd>a facility with no near substitute at the moment it is needed, whose owner sets the price rather than quoting one <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="10"><dt>bunkers</dt><dd>the vessel's fuel, priced separately from the hire and carried by the owner on a voyage charter and by the charterer on a time charter <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="1"><dt>bushel</dt><dd>volume measure standardized into weight, 60 lb for soybeans and wheat, 56 lb for corn <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>bushels per tonne</dt><dd>about 36.7 for soybeans and wheat, 39.4 for corn <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="13"><dt>buyer's call</dt><dd>a price-to-be-fixed contract in which the buyer holds the right to choose the moment of fixation <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="3"><dt>calendar spread</dt><dd>the price difference between two months of the same contract, traded as one instrument at one price <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="4"><dt>cancelling date</dt><dd>the last day of the laycan, after which the counterparty may cancel <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="11"><dt>capacity utilisation</dt><dd>the share of storage capacity actually occupied, the best leading indicator of what harvest basis is about to do <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="10"><dt>Capesize</dt><dd>a bulk carrier of about 180,000 dwt and up, too large for the Panama Canal, used mainly for iron ore and coal <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="3"><dt>carry market (contango)</dt><dd>a curve with later months above nearer ones, the market pays for storage <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="2"><dt>carry-in</dt><dd>stocks left over from the previous season, the starting point of a balance sheet <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="7"><dt>carryout</dt><dd>ending stocks, the desk's one-word name for what is left at the end of the marketing year <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="14"><dt>Center-South</dt><dd>the Brazilian sugarcane region running from Sao Paulo through Minas Gerais and Goias, about 90 percent of the national crop and the swing supplier of the world sugar market <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="1"><dt>cents per bushel</dt><dd>Chicago grain quoting unit, 4.39 dollars per bushel is spoken four thirty-nine <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="12"><dt>certified stock</dt><dd>coffee sampled, graded and stamped as deliverable against the futures contract and held in an exchange-licensed warehouse, the deliverable float rather than world inventory <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="4"><dt>CFR</dt><dd>cost and freight, the seller pays the voyage to a named destination but risk still passes at loading <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="4"><dt>charter party</dt><dd>the contract hiring the vessel, between charterer and shipowner <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="4"><dt>CIF</dt><dd>cost insurance and freight, CFR plus the seller buys the marine insurance the buyer would claim on <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="12"><dt>Coffee C (KC)</dt><dd>the ICE arabica futures contract, 37,500 lb quoted in US cents per pound with a 0.05 cent tick worth 18.75 dollars <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="8"><dt>conversion cost</dt><dd>the variable cost of turning beans into products, gas, power, hexane, labour and maintenance, typically 35 to 50 cents a bushel at a modern plant <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="1"><dt>conversion factors</dt><dd>36.7 bushels per tonne for wheat and beans and 39.4 for corn, so cents per bushel times 0.367 or 0.394 gives dollars per tonne <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="13"><dt>cooperative (co-op)</dt><dd>a grower-owned body that pools, mills and markets its members' coffee, and often the counterparty an exporter actually buys from <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="11"><dt>country elevator</dt><dd>the first commercial storage point off the farm, buying from growers and shipping onward by truck, rail or barge <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="9"><dt>CPO</dt><dd>crude palm oil, the unrefined oil pressed from the fruit of the oil palm and the benchmark grade traded internationally <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="7"><dt>Crop Production</dt><dd>the USDA report published alongside WASDE carrying the survey-based yield and area figures <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="5"><dt>cross-hedge</dt><dd>hedging with a contract that is not your grade or your origin, which removes flat price and adds correlation risk <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="8"><dt>crush capacity</dt><dd>installed daily processing volume, a physical constraint that cannot be expanded inside a marketing year <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="1"><dt>cwt</dt><dd>hundredweight, 100 lb, the quoting unit for US rice and cattle <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>cwt (hundredweight)</dt><dd>100 lb, the quoting unit for US rice <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="10"><dt>deadweight (dwt)</dt><dd>the total weight a vessel can carry including cargo, fuel, water, stores and crew, so always more than the cargo she can load <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="3"><dt>Dec over</dt><dd>spread quoting convention that names the expensive leg, December fifteen over means December is 15 cents above the other month <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="12"><dt>defect count</dt><dd>the number of black, broken, insect-damaged or foreign items in a fixed sample weight, the primary coffee grading measure <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="1"><dt>deferred</dt><dd>months or shipment windows further out <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="12"><dt>deliverable float</dt><dd>the quantity actually available to settle a futures delivery, which sets how far a front month can travel regardless of world supply <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="12"><dt>deliverable origin differential</dt><dd>the fixed premium or discount the contract assigns to each approved origin, unchanged whatever the physical market does <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="12"><dt>delivery notice period</dt><dd>the window in which shorts may tender certified stock against the expiring contract <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="10"><dt>demand-to-supply ratio</dt><dd>the Baltic measure of tonne-mile demand growth against fleet growth, above 1.0 when cargo is outrunning ships <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="2"><dt>demurrage</dt><dd>the penalty owed when a vessel is held beyond the agreed laytime <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="4"><dt>despatch</dt><dd>the reward paid when loading beats laytime, customarily half the demurrage rate <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="14"><dt>destination refinery</dt><dd>a standalone refinery at the consuming end that buys raws on the water and sells whites locally, earning the white premium less its costs rather than a crop margin <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="1"><dt>differential</dt><dd>the premium or discount to a named futures month, as in November plus 80, the negotiated part of a physical quote <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>differential (basis)</dt><dd>the premium or discount to a named futures month, quoted as plus 80 or minus 20 <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="11"><dt>discount schedule</dt><dd>the published table of price deductions for grain outside a contract's grade limits, and the raw material of every blending trade <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="9"><dt>discretionary blending</dt><dd>blending vegetable oil into the fuel pool purely because it is cheaper than gasoil, with no mandate and no subsidy behind it <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="6"><dt>distillers grains</dt><dd>DDGS, the protein co-product of ethanol production, sold back into the feed market <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="1"><dt>done</dt><dd>the word that seals a trade <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="10"><dt>draft</dt><dd>the depth of hull below the waterline, which rises as the ship loads and is the hard physical limit on which berths and rivers a vessel can enter <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="4"><dt>draft survey</dt><dd>weighing a cargo by reading the ship's displacement before and after loading <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="8"><dt>draw area</dt><dd>the geographic catchment a crush plant buys its beans from, whose size sets how hard it must bid the local basis <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="5"><dt>durum</dt><dd>the pasta wheat, a separate species with its own thin market <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="11"><dt>elevation margin</dt><dd>the toll an elevator earns for taking grain in, conditioning it and loading it out, separate from any gain on the basis <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="6"><dt>ethanol grind</dt><dd>the rate at which ethanol plants consume corn, which slows when the plant margin turns negative and removes corn demand in steps <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="14"><dt>ethanol parity</dt><dd>the sugar price at which a mill earns the same per unit of ATR from sugar as from ethanol, the level at which its production decision flips <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="13"><dt>EUDR</dt><dd>the EU deforestation regulation, which from December 2026 requires proof that a shipment's land was not deforested and which splits origin differentials into compliant and non-compliant <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="9"><dt>export levy</dt><dd>a tax charged on a commodity leaving the country, used in Indonesia both to discourage exports of crude palm oil and to fund the domestic blending subsidy <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="5"><dt>falling number</dt><dd>the sprout-damage test, a low number demotes milling wheat to feed wheat <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="9"><dt>FAME</dt><dd>fatty acid methyl ester, the chemical name for conventional biodiesel made by reacting a vegetable oil with methanol <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="13"><dt>farmgate price</dt><dd>what the grower is actually paid at the farm, after the intermediary's margin and inland costs are taken out of the export value <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="9"><dt>FCPO</dt><dd>the Bursa Malaysia Derivatives crude palm oil futures contract, 25 tonnes per lot, quoted in Malaysian ringgit per tonne with a one ringgit tick <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="7"><dt>feed and residual</dt><dd>the inferred demand line that carries livestock feeding together with every measurement error in the rest of the sheet <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="6"><dt>feed floor</dt><dd>the price at which feed substitution demand appears under a grain, corn setting the floor under feed wheat <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="6"><dt>feed wheat</dt><dd>wheat sold on energy and protein rather than milling specification, priced relationally against corn rather than at a flat price <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="1"><dt>firm</dt><dd>a tradable quote that binds if accepted, often with a time limit <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="13"><dt>first notice day</dt><dd>the first day on which a short futures position may be tendered for delivery, and the practical deadline for rolling a hedge <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="1"><dt>five percent more or less</dt><dd>the contractual tolerance on cargo size, exercised at the seller's option <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="13"><dt>fixation</dt><dd>the act of setting the futures leg of a price-to-be-fixed contract, which converts a differential into a flat price <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="13"><dt>fixation window</dt><dd>the period inside which the fixing party must declare, normally ending before the referenced contract's notice period <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="10"><dt>fixing</dt><dd>agreeing the charter of a specific vessel, the moment a freight exposure stops being open <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="13"><dt>fixing risk</dt><dd>the exposure created by the gap between agreeing a differential and setting the price, carried as market risk by the fixing party and as credit risk by the other <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="1"><dt>flat price</dt><dd>the full outright price level <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="2"><dt>flat price exposure</dt><dd>outright price risk, removed deliberately by hedging so only the basis remains <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="2"><dt>FOB</dt><dd>free on board, the cargo is priced at the load port with the buyer taking it from the ship's rail <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="10"><dt>forward freight agreement (FFA)</dt><dd>a cash-settled swap on a Baltic index route or basket over a calendar month, the only liquid way to hedge freight <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="3"><dt>front month</dt><dd>the nearest actively traded contract month, where liquidity is deepest <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="3"><dt>full carry</dt><dd>storage plus interest per month of holding grain, the practical ceiling on a carry spread <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="9"><dt>gasoil</dt><dd>the traded middle distillate that diesel prices off, and the reference against which discretionary blending economics are judged <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="10"><dt>geared vessel</dt><dd>a ship carrying its own cranes, which can therefore discharge at a berth with no shore equipment <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="12"><dt>grading</dt><dd>the exchange pass-fail examination of a sample covering defect count, screen size and a clean cup <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="7"><dt>Grain Stocks</dt><dd>the quarterly USDA survey of physical inventories, from which the feed and residual line is backed out <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="13"><dt>green coffee</dt><dd>unroasted milled coffee beans, the form in which all internationally traded coffee moves <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="8"><dt>gross processing margin</dt><dd>the industry name for product value minus raw material cost, the crush stated as a margin <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="10"><dt>Handysize</dt><dd>the smallest mainstream dry bulk class at roughly 10,000 to 40,000 dwt, geared and able to work berths larger ships cannot reach <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="5"><dt>hard red spring (HRS)</dt><dd>the 13.5 percent plus Minneapolis wheat bought to lift the protein of a grist <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="5"><dt>hard red winter (HRW)</dt><dd>the 11 to 12.5 percent bread wheat priced at Kansas City, the US wheat that competes with the Black Sea <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="11"><dt>harvest basis</dt><dd>the seasonal low in the cash-minus-futures spread, set when a year of crop arrives in six weeks into a pipe sized to move it over twelve months <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="6"><dt>harvested acres</dt><dd>area actually cut for grain, roughly 8 million acres below planted for US corn, and the denominator that yield is quoted against <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="8"><dt>hexane</dt><dd>the solvent used to extract the last of the oil from the flaked bean, and a real line in the conversion cost <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="1"><dt>hit</dt><dd>your bid was taken by a seller <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>hit the bid</dt><dd>to sell into someone else's bid <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="14"><dt>hydrous ethanol</dt><dd>roughly 95 percent ethanol sold directly at the pump for flex-fuel cars in Brazil, taking 1.6913 kg of ATR per litre <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="14"><dt>ICUMSA</dt><dd>the colour scale for refined sugar, lower being whiter, with the London No. 5 contract requiring 45 ICUMSA or better <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="7"><dt>implied disappearance</dt><dd>use derived by subtraction rather than by measurement, the technique that produces the residual lines of a balance sheet <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="6"><dt>inclusion rate</dt><dd>the share of a single ingredient in a feed ration, capped by nutrition and by anti-nutritional factors <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="4"><dt>Incoterms</dt><dd>the standard three-letter trade terms that allocate cost and risk between buyer and seller <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="1"><dt>indication</dt><dd>a guide price that is not firm <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="3"><dt>initial margin</dt><dd>the deposit the clearing house takes per lot when a position is opened <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="5"><dt>inter-exchange spread</dt><dd>the price gap between two exchanges pricing related but different goods, such as Kansas City over Chicago <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="3"><dt>inverse (backwardation)</dt><dd>a curve with nearer months above later ones, the market pays a premium for immediate delivery <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="8"><dt>joint product</dt><dd>two outputs produced in fixed proportion from one input, so that neither can be made without the other <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="9"><dt>kilolitre</dt><dd>one thousand litres, the volume unit Asian governments state biofuel mandates in, converted to tonnes using the fuel's density of about 0.88 t per cubic metre for biodiesel <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="1"><dt>laycan</dt><dd>the window during which a vessel may present for loading <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="4"><dt>laytime</dt><dd>the contractually allowed time to load or discharge before demurrage begins <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="12"><dt>licensed warehouse</dt><dd>a storage facility the exchange approves to hold deliverable stock, at named ports only <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="1"><dt>lift the offer</dt><dd>to buy from someone else's offer <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>lifted</dt><dd>your offer was taken by a buyer <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="3"><dt>limit move</dt><dd>an exchange-set maximum daily price change, trading pauses beyond it <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="2"><dt>line-up</dt><dd>the queue of vessels waiting to load at a port, a key driver of origin basis <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="11"><dt>load-out capacity</dt><dd>how fast an elevator can ship grain out, the lever that decides whether a full house is a crisis or a rotation <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="14"><dt>long ton</dt><dd>2,240 lb, the imperial weight unit the sugar No. 11 contract is still sized in at 50 long tons a lot <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="1"><dt>lot</dt><dd>one futures contract, 5,000 bushels for Chicago grains, the unit desks count positions in <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="13"><dt>managed money</dt><dd>speculative funds reported as non-commercial in exchange positioning data, which trade direction rather than physical <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="7"><dt>marketing year</dt><dd>the accounting year a crop is measured in, September to August for US corn and soybeans and June to May for US wheat <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="5"><dt>Matif milling wheat (EBM)</dt><dd>the Paris contract, 50 tonnes a lot quoted in euros per tonne and delivered into Rouen and Dunkirk <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="8"><dt>meal contract</dt><dd>CBOT soybean meal, 100 short tons, quoted in dollars per short ton <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="14"><dt>melt loss</dt><dd>the sugar lost between raws in and whites out, roughly six percent, which makes a refiner's break-even white premium a function of the raw price rather than a constant <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="1"><dt>metric tonne</dt><dd>2,204.6 lb, the grain trading weight unit outside the US <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>month codes</dt><dd>F G H J K M N Q U V X Z for January through December, the Z is December <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="7"><dt>NASS</dt><dd>USDA's National Agricultural Statistics Service, the body running the surveys behind the published numbers <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="12"><dt>natural process</dt><dd>coffee dried with the fruit still attached, giving a sweeter, heavier and more variable cup <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="13"><dt>net length</dt><dd>a fund category's long positions less its short positions, the number that says how much of a rally is positioning <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="7"><dt>new crop</dt><dd>the marketing year about to begin, priced by the contract months that follow the coming harvest <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="14"><dt>No. 11</dt><dd>the ICE raw cane sugar futures contract, 112,000 lb quoted in US cents per pound FOB at origin, and the world price of raw sugar <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="14"><dt>No. 5</dt><dd>the ICE London white sugar futures contract, 50 tonnes quoted in US dollars per tonne delivered, and the world price of refined sugar <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="4"><dt>nomination</dt><dd>formally naming the performing vessel under a cargo contract <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="8"><dt>NOPA</dt><dd>the National Oilseed Processors Association, whose monthly published crush figure makes US soybean crush a measured line rather than an inferred one <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="4"><dt>notice of readiness (NOR)</dt><dd>the master's formal declaration that the vessel has arrived and is ready, it starts the laytime clock <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="1"><dt>offer</dt><dd>the price a seller will accept <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="8"><dt>oil contract</dt><dd>CBOT soybean oil, 60,000 pounds, quoted in cents per pound <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="8"><dt>oil share</dt><dd>soybean oil's percentage of the combined value of the meal and oil produced from one bushel <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="9"><dt>oil share trade</dt><dd>long soybean oil against short soybean meal, the clean expression of a view on a fuel policy because it isolates relative product value from the bean basis <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="7"><dt>old crop</dt><dd>the marketing year now ending, priced by the contract months before the new harvest arrives <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="9"><dt>olein and stearin</dt><dd>the liquid and solid fractions palm separates into when refined, sold into cooking oil and into fats respectively <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="13"><dt>outright</dt><dd>a contract agreed at a flat price rather than as a differential, with no fixation to come <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="10"><dt>P7 and P8</dt><dd>Baltic Panamax route codes for US Gulf to Qingdao and Santos to Qingdao, the two assessments that set the soybean origin arb <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="10"><dt>Panamax and Kamsarmax</dt><dd>the 75,000 to 82,000 dwt workhorse of the grain and coal trades, usually gearless and drawing about fourteen metres fully loaded <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="2"><dt>paper</dt><dd>exchange futures and options, used by a physical desk to hedge rather than to speculate <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="10"><dt>part cargo</dt><dd>loading a vessel below capacity because the berth, river or canal cannot take her full draft <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="11"><dt>pass-fail specification</dt><dd>a contract term that cannot be met on average, such as contamination, infestation or an unapproved genetic event, where blending increases the affected tonnage instead of diluting it <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="2"><dt>physical (cash)</dt><dd>real cargoes under contract with specs and load windows, as opposed to paper <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="8"><dt>plant crush</dt><dd>what a physical plant actually earns, the board crush adjusted for bean, meal and oil basis and net of conversion cost <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="6"><dt>planted acres</dt><dd>area sown, the number that moves on farmer decisions and USDA area surveys <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="1"><dt>point</dt><dd>one hundredth of a cent per pound, how softs desks count moves <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>point (softs)</dt><dd>one hundredth of a cent per pound, so up 300 points means up 3 cents <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="14"><dt>polarisation (pol)</dt><dd>the sucrose purity of a sugar measured by the rotation of polarised light and expressed in degrees, the basis on which raw sugar is priced and settled <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="6"><dt>pollination</dt><dd>the roughly one-week corn window in mid-July in the northern hemisphere after which the ear count is fixed and no forecast can change it <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="5"><dt>price assessment</dt><dd>a published daily price built by surveying brokers and exporters, used where no futures contract exists <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="13"><dt>price-to-be-fixed (PTBF)</dt><dd>a physical contract where quantity, quality, shipment and differential are agreed now and the futures price is set later <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="1"><dt>prompt</dt><dd>the nearby month or shipment window, ready to move now <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="5"><dt>protein spec</dt><dd>the contractual protein percentage that turns the word wheat into a price <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="8"><dt>putting on the crush</dt><dd>buying bean futures and selling meal and oil futures against them in a 10-11-9 lot ratio, which fixes the processing margin <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="5"><dt>quality basis</dt><dd>the spread between the grade you own and the grade the futures contract delivers <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="6"><dt>ration</dt><dd>the formulated feed mix a mill grinds, in which every ingredient carries an inclusion limit and a substitution price against the others <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="14"><dt>raws</dt><dd>raw cane sugar, the crystalline product a cane mill exports before refining, traded at 96 degrees polarisation <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="11"><dt>receiving capacity</dt><dd>how fast an elevator can take grain in, in bushels or tonnes per hour, a different constraint from how much it can hold <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="9"><dt>renewable diesel</dt><dd>hydrotreated vegetable oil or HVO, a drop-in diesel chemically identical to fossil diesel and not limited by a blend wall, unlike FAME <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="11"><dt>replacement value</dt><dd>what it would cost to buy back today what you have just sold, the test of whether a price was genuinely good <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="2"><dt>residual</dt><dd>a figure obtained by subtraction, such as ending stocks, which absorbs any error in the larger numbers almost in full <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="13"><dt>retracement</dt><dd>the partial give-back of a price move once the fear that produced it fails to be confirmed <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="8"><dt>reverse crush</dt><dd>the opposite position, short beans and long products, used when a processor expects to idle capacity rather than run it <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="9"><dt>RFS</dt><dd>the US Renewable Fuel Standard, the rule that sets annual minimum volumes of renewable fuel that must be blended into American transport fuel <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="9"><dt>RIN</dt><dd>renewable identification number, the tradable compliance certificate generated with each gallon of renewable fuel, at 1.5 RINs per gallon of biodiesel, which is why a mandate volume must be checked for basis before it is multiplied by a feedstock factor <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="10"><dt>river-sea vessel</dt><dd>a small shallow-draft ship built to work both inland waterways and short sea legs, the only class able to load in the Sea of Azov <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="12"><dt>robusta</dt><dd>the low-altitude coffee species, hardier and higher-yielding, about double the caffeine and a flatter cup, priced in London <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="12"><dt>robusta contract (RC)</dt><dd>the London robusta futures contract, 10 tonnes quoted in dollars per tonne with a one dollar tick worth 10 dollars <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="3"><dt>roll</dt><dd>closing a hedge in one month and reopening it further out, executed as a spread trade <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="13"><dt>roll cost</dt><dd>the gain or loss from moving a hedge to a later month, equal to the spread between the two months and negative for a short hedge in an inverted market <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="8"><dt>run rate</dt><dd>the share of installed capacity a plant is actually operating at, the lever a crusher pulls when margins move <span class="gep">ep 8</span></dd></div><div class="gterm" data-ep="9"><dt>RVO</dt><dd>renewable volume obligation, the share of the national mandate assigned to an individual refiner or importer <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="6"><dt>safrinha</dt><dd>Brazil's second corn crop, planted February to March into soybean stubble and pollinating April to May, about three quarters of Brazilian corn production <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="12"><dt>screen size</dt><dd>bean size measured by the mesh it will not fall through, part of the deliverable specification <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="13"><dt>Section 301</dt><dd>the US statute under which country-specific tariffs are imposed after a trade-practice investigation, applied to Brazilian goods from 22 July 2026 with coffee exempt <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="11"><dt>segregation</dt><dd>keeping identities and grades physically apart in separate bins, the precondition for being able to blend deliberately later <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="13"><dt>seller's call</dt><dd>a price-to-be-fixed contract in which the seller holds the right to choose the moment of fixation <span class="gep">ep 13</span></dd></div><div class="gterm" data-ep="1"><dt>short ton</dt><dd>2,000 lb, used by US soybean meal, about 10 percent lighter than a metric tonne <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="11"><dt>shrink</dt><dd>weight lost when grain is dried to a safe keeping moisture, deducted as a percentage and a real cost to whoever owns the grain <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="5"><dt>soft red winter (SRW)</dt><dd>the low-protein soft wheat the Chicago contract delivers, used for cakes biscuits and crackers <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="12"><dt>soluble solids</dt><dd>the share of the coffee bean that dissolves in water, higher in robusta, which is why robusta dominates instant coffee <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="2"><dt>space time form</dt><dd>the three transformations a merchant is paid for, geography, storage and processing <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="9"><dt>standing bid</dt><dd>demand that is present regardless of price because it is created by legal obligation rather than by choice <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="4"><dt>statement of facts</dt><dd>the port log of events both sides use to fight laytime claims <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="2"><dt>stocks-to-use</dt><dd>ending stocks divided by total use, the market's tension gauge <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="11"><dt>storage tariff</dt><dd>the published charge for commercial storage, quoted in cents per bushel per month or per day, or in dollars per tonne per month <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="9"><dt>substitution spread</dt><dd>the price gap between two competing vegetable oils, which sets the point at which a refiner reformulates from one to the other <span class="gep">ep 9</span></dd></div><div class="gterm" data-ep="14"><dt>sugar mix</dt><dd>the share of a mill's recoverable sugars turned into sugar rather than ethanol, bounded above by the plant's crystallisation capacity <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="10"><dt>Supramax</dt><dd>a dry bulk vessel of roughly 50,000 to 60,000 dwt, normally carrying its own cranes, working minor bulks and shorter legs <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="11"><dt>temporary storage</dt><dd>ground piles, bunkers and bags used when permanent capacity is full, cheap per bushel to build and expensive per bushel in spoilage and rehandling <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="11"><dt>terminal elevator</dt><dd>large storage at a port, river or rail hub whose business is blending, load-out speed and access rather than farm origination <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="5"><dt>test weight</dt><dd>the density measure telling a miller how much flour comes out of a tonne <span class="gep">ep 5</span></dd></div><div class="gterm" data-ep="11"><dt>throughput</dt><dd>the volume moved through a facility in a period, the number that actually pays for a fixed asset because capacity earns nothing standing still <span class="gep">ep 11</span></dd></div><div class="gterm" data-ep="1"><dt>tick</dt><dd>smallest price increment, a quarter cent per bushel in Chicago grains, worth 12.50 dollars per lot <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="3"><dt>ticker</dt><dd>the short screen code a contract is spoken by, ZW wheat, ZC corn, ZS soybeans, ZM meal, ZL oil, KC coffee, SB sugar, CT cotton <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="10"><dt>time charter</dt><dd>hiring the vessel itself for a period at a price in dollars per day, with the charterer taking speed, weather, port delay and usually fuel <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="10"><dt>time charter equivalent (TCE)</dt><dd>a voyage's economics restated as dollars per day, which is how a shipowner compares one employment against another <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="14"><dt>toll refining</dt><dd>refining someone else's raws for a fee per tonne, which converts the white premium from a trading position into a fixed margin <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="7"><dt>total supply</dt><dd>carry-in plus production plus imports, the top block of a balance sheet <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="7"><dt>total use</dt><dd>domestic use plus exports, the bottom block of a balance sheet <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="7"><dt>trade average</dt><dd>the published mean of analysts' pre-report estimates, and therefore the expectation already contained in the price <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="6"><dt>trend yield</dt><dd>the yield a crop would produce on normal weather, the baseline against which a weather premium is measured <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="3"><dt>variation margin</dt><dd>the daily cash settlement of a position mark to market, paid the same day <span class="gep">ep 3</span></dd></div><div class="gterm" data-ep="14"><dt>VHP</dt><dd>very high polarisation raw sugar of around 99 degrees, the grade Brazil exports and which trades at a premium to the No. 11 screen <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="10"><dt>voyage charter</dt><dd>hiring a vessel to move a stated cargo between named ports for a price in dollars per tonne, with the owner carrying the voyage and delay risk <span class="gep">ep 10</span></dd></div><div class="gterm" data-ep="2"><dt>war-risk premium</dt><dd>an insurance surcharge on a vessel's hull value for sailing into a conflict zone, quoted as a percentage <span class="gep">ep 2</span></dd></div><div class="gterm" data-ep="1"><dt>WASDE</dt><dd>the USDA monthly World Agricultural Supply and Demand Estimates report <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>washed out</dt><dd>offsetting trades cancel each other and only the price difference is settled <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="12"><dt>washed process</dt><dd>coffee with the fruit stripped off before drying, giving a cleaner and more consistent cup <span class="gep">ep 12</span></dd></div><div class="gterm" data-ep="1"><dt>washout</dt><dd>cancelling two offsetting physical contracts by settling the price difference instead of shipping <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="6"><dt>weather premium</dt><dd>the gap between where a crop trades and where it would trade at trend yield, the price of a distribution of outcomes rather than of a forecast <span class="gep">ep 6</span></dd></div><div class="gterm" data-ep="4"><dt>weather working day</dt><dd>a laytime day that counts only when weather permits cargo work <span class="gep">ep 4</span></dd></div><div class="gterm" data-ep="7"><dt>whisper number</dt><dd>the expectation the market is actually trading into a report, which can sit away from the published trade average <span class="gep">ep 7</span></dd></div><div class="gterm" data-ep="14"><dt>white premium</dt><dd>the London white sugar price less the New York raw sugar price converted to the same unit, which is what the market pays for the act of refining <span class="gep now">ep 14</span></dd></div><div class="gterm" data-ep="1"><dt>work</dt><dd>leave an order resting with a broker <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>work an order</dt><dd>leave an order resting at your price and wait <span class="gep">ep 1</span></dd></div><div class="gterm" data-ep="1"><dt>workable</dt><dd>the quoted price is negotiable <span class="gep">ep 1</span></dd></div></dl><p class="gnone" hidden>No term matches that.</p></div></details></section>
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<a class="epprev" href="ep13.html"><span class="dir">← Previous</span><span class="ept">Coffee: Differentials, PTBF and Volatility</span><span class="epn">Episode 13</span></a>
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<details class="archive"><summary>All episodes<span class="sl">14 so far</span></summary><ol class="arclist"><li><a href="ep01.html"><b>01</b> The Units and the Language of the Desk</a></li><li><a href="ep02.html"><b>02</b> What a Merchant Does, and Why Basis Is the Whole Game</a></li><li><a href="ep03.html"><b>03</b> Futures Plumbing and the Shape of the Curve</a></li><li><a href="ep04.html"><b>04</b> The Physical Chain, End to End</a></li><li><a href="ep05.html"><b>05</b> Wheat: The Map and the Screens</a></li><li><a href="ep06.html"><b>06</b> Corn, Crop Calendars and Weather Risk</a></li><li><a href="ep07.html"><b>07</b> WASDE and Building a Balance Sheet</a></li><li><a href="ep08.html"><b>08</b> The Soybean Complex and the Crush</a></li><li><a href="ep09.html"><b>09</b> Vegetable oils and biofuels</a></li><li><a href="ep10.html"><b>10</b> Freight: Dry Bulk and Chartering</a></li><li><a href="ep11.html"><b>11</b> Storage, Elevation and Trade Flows</a></li><li><a href="ep12.html"><b>12</b> Coffee: The Market</a></li><li><a href="ep13.html"><b>13</b> Coffee: Differentials, PTBF and Volatility</a></li><li class="here" aria-current="page"><a href="ep14.html"><b>14</b> Sugar: Two Contracts, the Switch and the Refiner</a></li></ol></details>
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var none = document.querySelector('.gnone');
|
|
685
|
+
var pick = 'all';
|
|
686
|
+
function apply(){
|
|
687
|
+
var q = gf ? gf.value.trim().toLowerCase() : '', hits = 0;
|
|
688
|
+
rows.forEach(function(r){
|
|
689
|
+
var on = (pick === 'all' || r.dataset.ep === pick) &&
|
|
690
|
+
(!q || r.textContent.toLowerCase().indexOf(q) > -1);
|
|
691
|
+
r.hidden = !on; if(on) hits++;
|
|
692
|
+
});
|
|
693
|
+
if(none) none.hidden = hits > 0;
|
|
694
|
+
}
|
|
695
|
+
if(gf) gf.addEventListener('input', apply);
|
|
696
|
+
chips.forEach(function(c){
|
|
697
|
+
c.addEventListener('click', function(){
|
|
698
|
+
pick = c.dataset.gep;
|
|
699
|
+
chips.forEach(function(o){ o.classList.toggle('on', o === c); });
|
|
700
|
+
apply();
|
|
701
|
+
});
|
|
702
|
+
});
|
|
703
|
+
}
|
|
704
|
+
|
|
705
|
+
/* printing: paper has no disclosure triangles */
|
|
706
|
+
var reopen = [];
|
|
707
|
+
addEventListener('beforeprint', function(){
|
|
708
|
+
reopen = [].filter.call(document.querySelectorAll('details'), function(d){
|
|
709
|
+
return !d.open;
|
|
710
|
+
});
|
|
711
|
+
reopen.forEach(function(d){ d.open = true; });
|
|
712
|
+
});
|
|
713
|
+
addEventListener('afterprint', function(){
|
|
714
|
+
reopen.forEach(function(d){ d.open = false; });
|
|
715
|
+
reopen = [];
|
|
716
|
+
});
|
|
717
|
+
})();
|
|
718
|
+
</script>
|
|
719
|
+
</body>
|
|
720
|
+
</html>
|