World sugar futures on the Intercontinental Exchange moved 4% higher in Q3 2025 but were 16.4% lower over the first nine months of this year, settling at 16.10 cents per pound on September 30, 2025.
In an August 5 Barchart article on the sugar futures market, I concluded with the following:
Sugar’s bearish trend continues in early August 2025. If the sugar futures price can power through the 17 and 18.50 cents per pound level, the sweet commodity could get sweeter.
Nearby ICE world sugar futures were trading at 16.28 cents per pound and have remained relatively stable since early August.
The continuous ICE world sugar futures contract closed 2024 at 19.26 cents per pound.
The chart highlights the 19.8% decline to the July 2, 2025, low of 15.44 cents per pound. Since then, sugar has traded in a consolidation range primarily between 16 and 17 cents per pound.
Sugar futures have remained in a consolidation range at the lowest price level since 2021.
As the monthly continuous chart illustrates, sugar futures declined over 45% from the November 2023 high of 28.14 to the July 2025 low of 15.44 cents per pound. Meanwhile, as sugar prices fell, other soft commodities, including Arabica coffee, cocoa, and frozen concentrated orange juice futures, soared to record highs. While each soft commodity has an idiosyncratic characteristic that determines the path of least resistance of prices, Brazil is the leading producer of sugar, coffee beans, and oranges. Aside from adverse weather conditions and crop diseases, rising production costs and U.S. trade barriers have supported many agricultural soft commodity prices.
The bullish case for sugar over the coming months includes:
Rising production costs put upward pressure on prices.
Sugar’s consolidation period could eventually lead to a break to the upside. Considering the price action in other soft commodities that depend on Brazilian production, the odds favor the upside for the sugar futures market.
U.S. tariffs are trade barriers that can impact commodity prices, and sugar is no exception.
The demand for sugar could increase, given the changing regulations on U.S. sugar substitutes.
Sugar could be priced attractively at 16.50 cents per pound at the March 2026 futures price in October 2025.
The most direct route for a risk position in the world sugar market is the futures trading on the Intercontinental Exchange. At 16.72 cents per pound, each March futures contract containing 112,000 pounds of the sweet commodity has a $18,726.40 per contract value. The original margin requirement on a contract of ICE world sugar #11 is $1,071, translating to 5.7%. If the equity on a long or short position moves below $974 per contract, ICE requires maintenance margin payments.
Sugar futures are leveraged, as market participants can control each contract for a 5.7% down payment. Meanwhile, unlike other soft commodities, the ETF market offers an alternative to futures for market participants seeking price exposure in the world sugar market.
The Teucrium Sugar ETF (CANE) owns a portfolio of three actively traded ICE world sugar futures contracts, excluding the nearby contract.
While the March 2026 contract is currently the active month, CANE’s top holdings include:
Source: Teucrium
As the chart shows, CANE owns the ICE world sugar futures contract for May 2026, July 2026, and March 2027 delivery. The most price variance tends to occur in the nearby contract as it attracts the most hedging and speculative activity. Therefore, CANE tends to underperform the nearby contract on the upside and outperform during downside price corrections. CANE does not own the nearby contract to mitigate roll risk in the volatile sugar futures market.
The most recent rally in the continuous ICE sugar futures market took the price 8.7% higher from 15.51 on September 5 to 16.86 on September 15, 2025.
Over around the same period, CANE rose 3.9% from $10.37 to $10.77 per share. ICE sugar futures then declined 6.5% from 16.86 to 15.76 cents, while CANE fell 5.4% from $10.77 to $10.19 per share.
Over around the same period, CANE rose 3.9% from $10.37 to $10.77 per share. ICE sugar futures then declined 6.5% from 16.86 to 15.76 cents, while CANE fell 5.4% from $10.77 to $10.19 per share.
On the date of publication, Andrew Hecht did not have (either directly or indirectly) positions in any of the securities mentioned in this article. All information and data in this article is solely for informational purposes. This article was originally published on Barchart.com
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