Sugar #11 Rally Driven by Production Cuts and El Nino Impact

The Sugar #11 Contract has been on an upward trend, and experts believe it could continue to rally. The market has already reached within 37 cents of the contract high in the October'26 Contract Month and within 32 cents of the contract high in the March'27 Contact Month. According to a recent analysis, a Brazil production shortfall of 26% is driving the price increase, and future sugar production cuts in India, Thailand, Malaysia, and parts of the European Union are expected to further fuel the rally.

The analyst believes that the Sugar #11 Contract could trade up to $30.00, with the March'27 contract already setting a new high at 19.90. The expert points out that Thailand's sugar production could be reduced by 17% in 2026/2027 compared to last year, while India, Indonesia, and Malaysia are also experiencing problems due to the El Nino weather pattern.

The analyst is bullish on Soybean Oil and recommends getting long both the Soybean Oil and Sugar #11 Contracts in the Option Markets. The expert believes that there is a supply and demand problem for vegetable oils worldwide, particularly in the fourth quarter of this year.