Insight Focus
- Both the No.11 and No.5 sugar futures have weakened significantly in the past week.
- Speculators have closed a number of their long positions.
- The H/H white premium has strengthened, now standing at USD 143/tonne.
New York No.11 Raw Sugar Futures
After trading at 12-year highs between USD 0.27/lb and USD 0.28/lb for several weeks, the No.11 raw sugar futures have now weakened, falling back down to USD 0.25/lb.
Although raw sugar producers closed out nearly 10,000 lots of hedges, the price drop provided a good opportunity for consumers to increase their hedging.
By November 28, the spec long position dropped by 16,800 lots, less than 6% of the total number of long positions held the previous week.
Despite the addition of a few short positions, the overall net spec position has decreased by 21,400 lots to 166,000.
The raw sugar futures curve is no longer fully backwardated through to the end of 2026. The Oct’24/Mar’25 spread is flat while the Oct’25/Mar’26 spread is at a 5 point discount.
London No.5 Refined Sugar Futures
Following a similar trajectory to the No.11, the No.5 refined sugar futures has also weakened, falling from a high of USD 745/tonne at the start of the week to USD 696/tonne by Friday’s close.
That said, speculators of refined sugar remain heavily long the refined sugar futures.
The refined sugar futures curve remains heavily backwardated.
White Premium (Arbitrage)
With the No.11 and No.5 sugar futures making similar moves in the past week, the H/H white premium has strengthened to USD 143.7/tonne.
The 2024 white premiums remain strong. We’ve not seen this kind of strength in the H/H white premium at this stage in the cycle in at least 5 years.
For a more detailed view of the sugar futures and market data, please refer to the appendix below.
No.5 (White Sugar) Appendix
White Premium Appendix
