StoneX: Producers Accelerate Hedging, Sugar Prices May Rise

StoneX's analysis highlights that the 2026/27 sugarcane harvest season in Brazil's Center-South is commencing with a more balanced market condition compared to recent months, following an acceleration in sugar hedging by producers. According to the consultancy, this move reduces the selling pressure that had been limiting more significant international price increases. After lagging by up to 20 percentage points in hedging compared to the same period of the previous cycle, producers capitalized on the price rally observed in March to accelerate sales. The hedged volume surged from 41.8% to 59.5%, narrowing the deficit to approximately 10 percentage points compared to the 68.7% recorded at the end of March 2025. The firmer price scenario in March was driven by the escalation of conflicts in the Middle East, which contributed to speculative agents reducing their short positions. Simultaneously, producers, who were still behind on their hedging, took advantage of the liquidity to advance sales. In practice, this movement limited a more substantial increase in prices, as the additional supply from hedging offset some of the buying pressure. Nevertheless, the recovery in sales pace is altering market dynamics. "The market is now operating under a more balanced condition, with less resistance from the producer side to upward movements," said Nathalia Bruni, a risk management consultant at StoneX, in a note.