WALSH PURE SPREADER
Pure Hedge Division
RICH MORAN 10/15/2026
MAY-JUL SUGAR #11 SPREAD (SBK27-SBN27)
The Sugar #11 market has been on the rise since the MAR #11 Sugar contract (SBH27) traded 15.28 on 7/31/26. Today’s settlement of 21.13 for SBH27 is a new high settlement for the contract. I think that the strength in the Sugar #11 contract may continue for some time now.
India, the world’s second largest sugar producing country, relies on its monsoon season for the necessary rainfall to produce its sugar. This year’s rainfall was the lowest India’s rainfall has been in eleven years. India is almost always an exporter of sugar, but there is a good possibility that it may need to import a significant amount of sugar this time around. This hasn’t happened since 2017-18. The European Union and the UK had hot and dry issues of their own that has affected their sugar production. Thailand’s production is down about 17% and Brazil’s sugar production was down 26% in June. There is an expected global shortage of Sugar production of nearly 300,000 MT for 2026-27.
Nothing is always in commodity futures spreads, but in general, Sugar #11 spreads are directional. What I mean by that is the front month will often lead the way. So, if Sugar #11 rallies, Sugar #11 spreads can commonly go up as well.
As I mentioned, I feel there is still more room for Sugar #11 on the upside. I am suggesting we try to buy the MAY-JUL Sugar #11 Spread (SBK27-SBN27) at 0.52. This spread has not settled below the 14-day or 21-day moving average in the month of October this year. The price of 52 is 4 cents below today’s settlement and 5 cents above these moving averages.
If you are able to buy SBK27-SBN27 at 0.52:
Risk 0.25 (price of 0.27) or $280.00 Per Spread to make 0.50 (price 1.02) or $560.00 Per Spread, plus fees and commissions.
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Rich Moran
Senior Commodities Broker
Direct: (312)985-0298
Walsh Trading, Inc. is registered as a Guaranteed Introducing Broker with the Commodity Futures Trading Commission and an NFA Member.
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