Sugar cane markets are entering a new phase of volatility as prices on the ICE Zucker Nr.11 contract continue to retreat from earlier highs. The March 2026 front-month contract settled at 14.95 US cents per pound, down 1% week-over-week, echoing a wider downward trend across the futures curve. Softening prices are fueled by a combination of resurgent global supply, improving weather conditions in major growing areas, and strong export signals from top producers. While recent USDA and ISO reports confirm rising global stock levels, market participants are recalibrating their expectations in light of easing El Niño disruptions and steadier Indian monsoons. This report dives into the latest price action, supply and demand dynamics, production outlooks, speculative activity, and trading strategies for the weeks ahead.
📈 Prices: Recent Developments at Key Exchanges
| Contract | Closing Price (US-Cent/lb) | Weekly Change | Settlement Date | Market Sentiment |
|---|---|---|---|---|
| Mar 26 | 14.95 | -1.00% | 15.12.2025 | Bearish |
| May 26 | 14.58 | -0.82% | 15.12.2025 | Bearish |
| Jul 26 | 14.58 | -0.62% | 15.12.2025 | Bearish |
| Oct 26 | 14.90 | -0.47% | 15.12.2025 | Bearish |
| Mar 27 | 15.58 | -0.45% | 15.12.2025 | Neutral |
| May 27 | 15.42 | -0.45% | 15.12.2025 | Neutral |
| Jul 27 | 15.41 | -0.39% | 15.12.2025 | Neutral |
| Oct 27 | 15.65 | -0.38% | 15.12.2025 | Neutral |
| Mar 28 | 16.22 | -0.31% | 15.12.2025 | Neutral |
| May 28 | 16.05 | -0.25% | 15.12.2025 | Neutral |
| Jul 28 | 16.02 | -0.25% | 15.12.2025 | Neutral |
| Oct 28 | 16.22 | -0.25% | 15.12.2025 | Neutral |
🌍 Supply & Demand Drivers
- Global stocks build: The International Sugar Organization projects a 2024/25 surplus, with record crops expected in Brazil and solid recovery in India after 2023’s El Niño disruptions.
- Stronger exports: Brazil continues to ship large volumes, helped by a favorable Real/USD exchange rate and strong crushing rates.
- Import demand: Southeast Asian buyers increase tenders as domestic production lags, but Chinese demand remains moderate amid cautious economic sentiment.
- Speculative retreat: Managed money net longs have trimmed positions, reflecting reduced upward price momentum.
- Currency factors: The strengthening US dollar is dampening demand from some importers.
📊 Fundamentals
- USDA June 2024 report: World sugar production to rise 2.3% year-on-year, driven by Brazil’s output.
- ISO: 2024/25 global production seen above 183 million tonnes vs. 179 million tonnes prior year; global inventory-to-use ratio up 1 point to 26%.
- Indian monsoon: Normal pattern restored, boosting cane yields and reducing risk premium.
- Thai production: Below average but improving due to timely rainfall.
🌦️ Weather & Crop Outlook
- Brazil: Recent rains support cane development; harvest progressing rapidly in Center-South. Weather forecast neutral to slightly bearish for price as field yields remain robust.
- India: Monsoon rains normalizing, supporting improved planting and growth. Yield prospects restored to long-term average.
- Thailand: Showers easing earlier drought, but full recovery to normal production not expected until next year.
- Global impacts: No major weather threat currently impacting top producers, reducing likelihood of further price spikes near term.
🌏 Global Production & Stocks Overview
| Country | 2024/25 Output (Mt) | YoY Change | Inventories (Mt) |
|---|---|---|---|
| Brazil | 46.4 | +4% | 11.2 |
| India | 33.2 | +3% | 6.7 |
| Thailand | 12.0 | +2% | 4.0 |
| EU | 16.5 | +1% | 2.5 |
| China | 10.0 | 0% | 5.5 |
📆 Trading Outlook & Recommendations
- Bearish bias likely to persist until Q1 2025 unless adverse weather emerges.
- Physical buyers advised to lock in forward coverage on dips below 14.90 c/lb.
- Producers may consider hedging additional 2025 output as seasonal lows threaten to erode margins.
- Watch currency moves—further Real strength may moderate Brazil’s pace of exports.
- Speculators: Caution on shorting at multi-month lows, as profit-taking rebounds may occur.
⏩ 3-Day Regional Price Forecast (ICE)
| Date | Mar 26 (US-Cent/lb) | May 26 (US-Cent/lb) | Jul 26 (US-Cent/lb) |
|---|---|---|---|
| Day 1 | 14.85 – 15.00 | 14.50 – 14.65 | 14.50 – 14.65 |
| Day 2 | 14.80 – 14.95 | 14.45 – 14.60 | 14.45 – 14.60 |
| Day 3 | 14.75 – 14.85 | 14.40 – 14.55 | 14.40 – 14.55 |