US Sugar #11 Futures rose 0.9% in pre-open trading to 14.96 cents per pound, marking the fourth straight session in which the contract reached a six-week high. Traders pointed to a cluster of weather and supply-side developments that tightened near-term market expectations and lifted the October contract from a session open of 14.87 cents toward an intraday peak of 15.25 cents per pound.
Weather strain in India
At the center of the recent move is India’s monsoon performance. India’s Meteorological Department reported cumulative monsoon rainfall running 42% below normal as of June 29, and the Earth Science Ministry has warned that the current season could be the weakest in 11 years. Market participants view the shortfall in rainfall as a direct risk to sugarcane yields in India, the world’s second-largest sugar producer, supporting a tighter supply outlook.
Brazil’s ethanol-driven diversion
Brazilian production data added to the bullish narrative. Industry group Unica reported that Center-South sugar production for the 2026/27 season through May totaled 6.838 million metric tons, down 2.0% from the same period a year earlier. The data show a marked shift in how cane was processed: the share of cane crushed for ethanol rose to 58.38% from 49.91% in the prior year. That increased diversion of cane toward ethanol has the practical effect of reducing the volume of cane available for sugar manufacture, reinforcing upward price pressure.
El Nino confirmation and global rainfall risk
Compounding local weather concerns is a confirmed El Nino event. Japan’s Meteorological Agency confirmed the pattern’s formation on June 17, and forecasters have cautioned it is likely to curb rainfall across Brazil, India, and Thailand - the three largest sugar-producing regions. The prospect of broadly reduced rainfall across these regions is being interpreted as an additional factor that could trim global output.
Analyst revisions and delivery dynamics
Several commodity analysts have adjusted their 2026/27 global sugar balances toward deficit. The International Sugar Organization is forecasting a shortfall of 262,000 metric tons. StoneX projects a larger deficit of 550,000 metric tons, while Covrig Analytics has narrowed its prior surplus estimate to just 100,000 metric tons. These downward revisions in projected supply have reinforced the bullish case for contracts trading into the autumn months.
Market positioning has also been affected by recent contract expiries and deliveries. The July ICE contract expired on June 30 with Cofco recorded as the sole supplier of 796,500 tonnes. That delivery has contributed to shifts in positions, with market attention now concentrated on the October Sugar #11 contract.
Net effect
Taken together, the combination of India’s weak monsoon, Brazil’s ethanol-driven diversion of cane away from sugar, the confirmed El Nino’s potential to reduce rainfall across major producing regions, and a growing consensus among forecasters that the 2026/27 global balance may move into deficit has created a compelling bullish case. Those factors helped lift the October Sugar #11 contract off its session open and toward the session high noted above.
Summary
US Sugar #11 Futures rose to 14.96 cents per pound in pre-open trade as India’s significantly below-normal monsoon rainfall, a year-on-year decline in Brazil’s Center-South sugar production through May driven by higher ethanol diversion, and a confirmed El Nino that could dampen rainfall across major producing regions tightened global supply expectations. Multiple forecasters have revised the 2026/27 global sugar balance toward deficit, and July contract delivery activity has shifted positioning ahead of the October contract.