I asked why ICE World Sugar futures were stuck in neutral in a July 16, 2026, Barchart article, concluding with the following:
Historically, sugar can be a highly volatile soft commodity, but the current price action is tame. Given the uncertainty of energy prices, sugar could experience significant volatility. A break of 13.34 or 16.10 could trigger a substantial move in the soft commodity that is food and fuel.
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The nearby October futures contract was trading at 14.88 cents per pound on July 14, 2026. Since then, sugar has made higher lows and higher highs, rising above 18 cents in early September 2026.
Sugar rallies to a new 2026 high
After reaching a bottom of 13.34 cents per pound in February 2026, nearby ICE world sugar futures traded between 13.39 and 16.10 cents per pound until August 2026, when the price took off on the upside.
The monthly continuous ICE world sugar futures chart shows the rally that took the futures to a high of 18.66 cents per pound on August 28, the highest price since April 2025.
Brazil is the leading free-market sugar producer and exporter
Sugar is a highly subsidized agricultural product, with sugarcane and sugar beet production receiving government subsidies in many countries to encourage production.
The chart shows that Russia is the leading sugar beet producer in 2026.
Meanwhile, sugarcane production is sixteen times higher than sugar beet production, and Brazil produces the most sugarcane.
The chart shows that Brazil accounted for 44.4% of total 2025 sugar exports. Brazilian sugar is free-market, unsubsidized sugar that trades at the ICE world sugar futures price.
Brazilian sugar production is the critical factor in the path of least resistance for ICE world sugar #11 futures prices.
Rising gasoline and ethanol prices, and U.S. tariffs have pushed sugar higher
The U.S. and Brazil are the world's top ethanol-producing countries.
The U.S. is the world's leading corn producer, so corn is the primary ingredient in U.S. ethanol production. Brazil is the leading sugarcane producer, and Brazilian sugarcane output is the primary ingredient in Brazilian ethanol production.
A combination of high oil, gasoline, and distillate fuel prices, driven by the ongoing conflict between the United States and Iran and the blockade of the Strait of Hormuz, has lifted energy prices and increased demand for ethanol. U.S. corn and Brazilian sugarcane prices have rallied as energy product prices have risen. Higher energy prices have increased the domestic demand for Brazilian sugarcane, limiting exports. Meanwhile, weather risks have threatened crops in India, Thailand, and Europe. A June 6, 2026 article on AgroLatam highlighted that the USDA is forecasting a " significant tightening of global sugar balance for the 2026/2027 marketing year ," forecasting an international surplus of 4.8 million metric tons, substantially lower than previous forecasts and signaling tight supplies over the coming months.
Meanwhile, the U.S. administration's trade policies and tariffs have only created trade roadblocks, distorting global sugar supply and demand fundamentals and prices.
Levels to watch in the sugar futures market. The forward curve is tight
The long-term sugar futures chart highlights the support and resistance levels to watch over the coming weeks and months.
The continuous contract chart shows that technical support is at the February 2026 low of 13.34 cents per pound. The first upside target is currently at the February 2025 high of 20.19 cents. Above that, the September 2024 high of 23.64 and the November 2023 high of 28.14 cents per pound are the critical technical resistance levels. The support and resistance levels show that risk-reward could favor the upside, as ICE World Sugar #11 has established a short-term bullish trend.
The ICE World Sugar #11 forward curve shows expectations for higher prices for March 2027 delivery. The curve flattens into a slight backwardation from May 2027 through July 2029, suggesting market participants expect the supply picture to remain tight.
CANE is a liquid sugar ETF and an alternative to the ICE futures
World sugar futures #11 have broken out to the upside, and the supply-demand fundamentals have turned bullish. A continuation of high energy prices may only put additional upward pressure on sugar prices over the coming weeks and months.
The most direct route to participate in a sugar bull market is futures and futures options on the Intercontinental Exchange. Each contract contains 112,000 pounds; at 18.36 cents per pound, the contract value is $20,563.20. ICE's original margin requirement is currently $1,232 per contract, meaning a market participant can control $20,563.20 worth of world sugar futures for a 6% down payment. If equity falls below $1,120 per contract, the exchange requires maintenance margin payments. The futures market requires specialized accounts and involves leverage. Increased volatility in sugar prices will increase margin requirement levels.
The Teucrium Sugar ETF (CANE) owns a portfolio of three ICE sugar futures contracts, excluding the nearby contract. At $11.58 per share, CANE had over $64.75 million in assets under management. CANE trades an average of over 320,000 contracts per day and charges a 0.54% management fee.
The most recent rally in October ICE world sugar #11 futures took the price 35.8% higher, from 13.74 on June 22, 2026, to 18.66 cents per pound on August 28.
Over the same period, CANE rose 26.8% from $9.14 to $11.59 per share. As the most significant price volatility tends to occur in the nearby contract, CANE often underperforms the nearby ICE contract on the upside, but outperforms when prices decline.
High energy prices, weather issues in producing areas, trade tariffs and sanctions, and an emerging bullish trend could push world sugar #11 futures and the CANE ETF substantially higher over the coming weeks and months and into 2027.
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
