It looks like J.P. Morgan knows the proper paperwork to fill out when THEY want to take delivery, its just when YOU want to take delivery the roadblocks appear. I wonder if this sugar delivery is a partial hedge against their massive silver losses?

Regards - VHF

-

JPMorgan Takes Delivery of Almost 1 Million Tons of Sugar, Most Since 2009

Debarati Roy and Isis Almeida - Bloomberg

March 2, 2011

A JPMorgan Chase & Co. unit took delivery of almost 1 million metric tons of raw sugar, the most for the commodity since 2009, to settle the expiring March futures contract in New York.

JPMorgan Futures accepted delivery on 18,748 sugar contracts, or the equivalent of 952,398 tons, ICE Futures U.S. said yesterday on its website. That represents 9.2 percent of the current year’s U.S. consumption as estimated by the government. Prices climbed to the highest level in almost three weeks in New York trading today.

Raw sugar doubled in 2010’s second half on concern that global supplies would trail demand following crop damage in Australia and India. The sweetener touched a 30-year high of 36.08 cents a pound on Feb. 2. Nearer-dated contracts trade at higher prices than those with later dates, a so-called backwardation that may signal concern about supply.

Agricultural prices have a “lot of risks to the upside,” Abah Ofon, an analyst at Standard Chartered Plc, said today by phone in Singapore. “When there’s a risk of supply disruptions, a lot of users would rather take delivery now.”

Raw sugar for May delivery climbed 1.3 cents, or 4.4 percent, to 30.56 cents a pound at 12:14 p.m. on ICE Futures U.S. in New York, heading for the biggest gain since Dec. 31. Prices reached 30.61 cents, the highest level since Feb. 11. White, or refined, sugar for May delivery gained $28.80, or 3.9 percent, to $762.20 a ton on NYSE Liffe in London.

1.35 Million Tons

“JP Morgan’s futures business accepts and makes deliveries on behalf of clients, as part of our normal business operations that facilitate customer access to global commodities exchanges,” Justin Perras, a JPMorgan spokesman, said today in an e-mailed reply to Bloomberg questions. JPMorgan is the second-largest U.S. bank by assets.

The delivery was the biggest since 1.35 million tons were delivered to satisfy the July 2009 contract, exchange data show. Each sugar contract is for 112,000 pounds (50.8 metric tons). The U.S. will consume 11.41 million short tons (10.4 million metric tons) in the year that began Oct. 1, the Department of Agriculture estimated on Feb. 9.

“The delivery was above the 700,000 metric tons we were expecting,” said Marcos Mine, head of sugar and ethanol trading at ICAP Brasil.

More than two-thirds of the delivered sugar came from Brazil, the world’s largest producer and exporter, according to the ICE report. The rest came from Central America and Thailand. March 15 is the last day for delivery against the recently expired contract.

‘Strong Hands’

“The larger-than-expected delivery against March may have weighed on sentiment initially, but as the sugar was received by strong hands, attention shifted onto the implications for May and May/July spreads,” Nick Penney, an analyst at Sucden Financial in London, said in a report today.

Raw sugar closed 0.6 percent lower at 29.26 cents a pound yesterday. Refined sweetener fell 1.4 percent to $733.40 a ton.

World demand exceeded supply by about 8 million tons last year, Ofon said. Improving supplies from Brazil may move the market toward a balance, with either a shortage or an excess of 1 million tons this year, he said.

“Inventories are very low, and users are rebuilding their stockpiles,” Ofon said. “It’s a backdrop against a very tight market.”

The global sugar market will be in deficit for a third year in the 2010-11 marketing season, C. Czarnikow Sugar Futures Ltd. said yesterday. The shortfall is 3.7 million tons now, it said.

Brazilian raw-sugar exports declined 6.5 percent from a year earlier to 915,900 tons in February, data from the Trade Ministry showed yesterday.