Here is our Weekly Sugar Market Analysis for the week ending June 5, 2026. The international sugar market came under renewed pressure on Friday, extending its recent downtrend…

I. Market Overview

The international sugar market came under renewed pressure on Friday, June 5, extending its recent downtrend.

On the Intercontinental Exchange (ICE), July raw sugar futures settled down 13 points at 14.14 cents per pound. In London, August white sugar futures attempted an intraday rebound before weakening again, closing at $446.90 per tonne, down 51 points.

The daily chart for ICE July raw sugar futures reveals a broad, choppy decline in recent sessions:

Moving Averages: At 14.12, the current price has fallen below all major moving averages — the 5-day (14.28), 10-day (14.27), 20-day (14.60), 40-day (14.42), and 60-day (14.69). The averages are stacked in a bearish alignment, with short-term lines capping price action and signaling a lack of upward momentum.
MACD: The indicator remains below the zero line, with widening red (negative) histogram bars, indicating that bearish forces hold the upper hand for now.
Open Interest & Volume: The latest open interest stands at 340,000 contracts, down 7,260 from the prior day, on volume of 117,940 contracts. Falling open interest alongside declining prices suggests some long positions are exiting the market, reflecting a cautious, wait-and-see mood.

On a technical basis, downside support lies at the prior lows of 13.86 and 13.39, while the 14.42–14.60 zone represents a dense band of moving-average resistance overhead.

II. Fundamental Analysis

1. Bearish Factors Driving Near-Term Weakness

Crude Oil Slump: WTI crude tumbled more than 3% on Friday. Lower fossil fuel prices erode ethanol’s competitiveness, potentially encouraging global mills to divert more sugarcane toward sugar production — thereby boosting global supply.
Weaker Brazilian Real: The real fell to roughly a six-week low against the U.S. dollar, enhancing the competitiveness of Brazilian sugar exports and adding selling pressure to international markets.
Ample Global Supply: Data from Brazil’s sugarcane industry group UNICA showed that Center-South sugar output reached 2.475 million tonnes in April of the 2026/27 crushing season — a sharp 55.3% year-on-year increase — with sucrose content up 5.4% from a year earlier. Meanwhile, Thailand exported 1.6 million tonnes of sugar from January through April, up 29% year-on-year, further reinforcing expectations of abundant supply.

2. Potential Bullish Support Limiting Losses

Weather risk remains a key focus for the market.

India’s Monsoon: India’s Meteorological Department has lowered its rainfall forecast for the June–September monsoon season from 92% to 90% of the long-term average.
El Niño Threat: According to the U.S. NOAA, there is an 82% probability of an El Niño forming during the May–July window, with a 67% chance it could develop into a “super El Niño.” Should drought hit major producing regions such as Brazil, India, and Thailand, future global sugar output could be threatened — providing potential support for prices.

III. Market Outlook

On balance, the global raw sugar market remains caught in a near-term tug-of-war between “ample supply pressure” and “El Niño expectations.”

Under the triple bearish weight of weak crude oil, a depreciating real, and rising global output, sugar prices appear more likely to remain soft in the short term, with no clear technical signs of stabilization yet emerging. Some analysts favor maintaining a sell-the-rally approach for now, watching closely whether the prior low at 13.39 can hold as support.

Over the medium to long term, market participants should monitor the evolution of El Niño and Indian monsoon rainfall. Should the El Niño narrative gain traction, a wave of short-covering could spark a price rebound. Investors are advised to manage position sizes carefully and watch for the validity of any breakout at key support and resistance levels.

Disclaimer: The analysis and data contained in this article are provided for informational and educational purposes only and do not constitute financial, investment, or trading advice. Commodity trading involves significant risk. ynsugar.com holds no responsibility for any trading losses incurred based on this information.