The Sugar Market Is Calling—Answer with These Bold Trades!

Unlike many other crops tied to specific seasonal cycles in one hemisphere, sugar is a unique commodity because it grows in both hemispheres simultaneously. Sugarcane, the primary source of raw sugar, thrives in tropical and subtropical regions, while sugar beets, grown in temperate climates, complement the global supply. This dual-hemisphere production creates a complex supply dynamic, with harvests occurring year-round but peaking at different times depending on the region. Brazil, the world’s largest sugar producer, accounts for about 22.3% of global production in the 2023/24 season. Its sugarcane harvest typically runs from April to November, with peak output in June to August, flooding the market with supply during these months.

Seasonal Analysis 

According to Moore Research Center, Inc. (MRCI), sugar prices historically rally from mid-May to late June. MRCI’s data, based on 15 (black line) and 30 (purple line) years of historical patterns, shows that Sugar #11 futures, traded on the Intercontinental Exchange (ICE), often see a price increase during this period, with a high reliability of closing higher by late June. This seasonal tendency may be tied to the expiration of the July Sugar #11 futures contract, which expires June 30. As the July contract nears expiration, speculators and hedgers adjust positions, often leading to increased buying pressure. This can tighten supply perceptions, especially if Brazilian production hasn’t yet peaked or weather concerns in other producing regions, like India or Thailand, spark demand for futures contracts.

Source: MRCI 

Technical Picture with Seasonal Overlay 

Source: Barchart

The current technical picture for sugar shows prices have found support during May and appear to be rising into this seasonal buying pattern. I’ve also highlighted how well the sugar contract has respected its seasonal pattern recently.   

The Disaggregated Commitment of Traders (COT) Report 

Source: Barchart

The latest Disaggregated Commitments of Traders (COT) report from the Commodity Futures Trading Commission (CFTC), dated May 6, 2025, provides insight into market sentiment. Money managers hold a net long position of 17,633 contracts in Sugar #11 futures, down from 92,726 contracts in March 2025. This reduction suggests a cautious but still bullish sentiment, with long positions outweighing shorts by a moderate margin. Cumulative short positions have also decreased, from 38,214 to 29,507 contracts, indicating less bearish conviction. This balanced positioning reflects uncertainty about macroeconomic factors, such as global demand and potential trade disruptions. However, the net long stance suggests money managers still see upside potential, aligning with the seasonal rally.

Products to Trade 

Readers looking to participate in the sugar market have several options:

• The primary vehicle is the Sugar #11 futures contract (SB), traded on the ICE, representing 112,000 pounds of raw cane sugar, quoted in US cents per pound. Each 0.01 cent move equals $11.20 per contract.
• Options on Sugar #11 futures offer another way to speculate or hedge, allowing traders to limit risk while targeting price movements.
• For those preferring equity accounts, the Teucrium Sugar Fund (CANE) provides unleveraged exposure to sugar prices through an ETF, designed to minimize the impact of contango and backwardation by avoiding front-month contracts. 

Actions to Take 

To capitalize on the mid-May to late-June rally, traders could consider these action steps:

• Buy July Sugar #11 Futures (SB): Enter a long position around mid-May, targeting a close by late June, using stop orders to manage risk. The seasonal low of 16.97 is a point at which the trade may no longer be valid. And the upside target could be in the 19.50 vicinity.        
• Use Options: Purchase call options on Sugar #11 futures to limit downside risk while benefiting from potential price increases. Select strikes near the current price for a balance of cost and upside.
• Trade CANE ETF: Buy shares of the Teucrium Sugar Fund for simpler exposure without managing futures margin requirements. Monitor for entry around mid-May and exit by late June.
• Spread Trading: Use calendar spreads (e.g., long July, short October) to capitalize on price differences driven by seasonal supply shifts, reducing directional risk.

Disclaimer: This article is for educational purposes only and is not intended as trading advice to buy or sell. Trading futures, options, or ETFs involves significant risk and may be unsuitable for all investors. Consult a qualified financial advisor before making trading decisions.

In Closing…

The seasonal rally in Sugar #11 futures from mid-May to late June, as identified by MRCI research, offers traders a potential opportunity driven by Brazil’s harvest cycle and the July sugar futures contract expiration. With money managers showing cautious bullishness in the latest COT report, traders can participate in futures, options, or the CANE ETF. Traders may find this period profitable by aligning with seasonal patterns and managing risk, but they must approach it with discipline and awareness of market risks.