Sugar loses 1.5% in 4-year lows amid ample monsoon rains in Asia 📉

Rising supply in the sugar market pushes SUGAR toward 4-year lows. The sugar market is under pressure due to an increase in global supply, driven primarily by major sugarcane producers such as India, Brazil, and Thailand. Weather patterns this year point to abundant monsoon rains, which are expected to boost harvests in India (the world’s largest producer) and Thailand (the largest exporter) for the 2025/2026 season.

SUGAR (H1 interval)

Sugar prices are moving within a relatively narrow, downward-sloping price channel. Support is located around the $16 mark, based on previous price reactions. Key resistance is identified in the $16.6–$16.8 range.

Sugar (D1 interval)

Source: xStation5

Commitment of Traders Report – June 17, 2025

The sugar market has entered a phase of clear distribution by speculative funds, which are reducing long positions and increasing shorts. Meanwhile, commercial hedgers preparing for physical delivery are positioning themselves for greater volatility – both long and short positions are rising. This type of positioning typically signals a potential market reversal or a period of heightened volatility, particularly when there is a high concentration of shorts among the largest players.

Speculative Funds (Non-Commercials) Showing Signs of Nervousness

• There has been a continued decline in speculative long positions, down by 18,285 contracts to a total of 199,061 – a clear sign of eroding confidence in further price increases.
• At the same time, short positions among Non-Commercials have grown by 9,341 contracts – indicating that hedge funds are actively betting on a price decline.
• As a result, the net position of Non-Commercial traders has dropped by over 27,000 contracts, shifting their stance from bullish to more neutral.

Activity Among Commercials (Physical Hedgers)

• Commercial participants increased their long positions by 12,589 contracts, even as short positions also rose by 12,269. This reflects active hedging on both sides of the market and suggests expectations of increased volatility, with no clear directional bias for spot sugar prices. Overall, the net position among Commercials declined only slightly, hinting at a modest tilt toward downside risk protection.

Overall Decline in Speculative Engagement

• Total "reportable" positions (Non-Commercials + Commercials + Spreading) decreased by 24,131 contracts, which contributed to a drop in total open interest by 25,659 contracts – an indication of speculative capital flowing out of the sugar market. Long and short positions are now almost perfectly balanced: 807,401 vs. 803,316 (a marginal difference of just 0.5%).

Dominance of the Largest Players

The 8 largest traders control over 31% of total short positions and 26% of total long positions – suggesting significant short-side risk concentration. In net terms, the top 8 short holders account for 21.2% of the market, compared to just 17% for the largest long holders. This may serve as a contrarian signal, implying that the market could be excessively tilted toward downside expectations.

Source: CoT, CFTC