What is the sugar futures contract? (2024)

What is the sugar futures contract?

The White Sugar futures contract is used as the global benchmark for the pricing of physical white sugar. It is actively traded by the international sugar trade, sugar millers, refiners, and end-users (manufacturers) as well as by managed funds and both institutional and short-term investors.

How big is a sugar futures contract?

How do sugar futures work?

Sugar futures contract trades in 1/100 cent per pound price increments. As each contract is equal to 112,000 pounds of sugar, a 0.01 point move equates to $11.20 ($0.05 x 37,500/100). If Sugar prices were to move up or down 3.00 points, that would equate to $336.00 +/-.

What is the sugar forward contract?

Description. The Sugar No. 11 contract is the world benchmark contract for raw sugar trading. The contract prices the physical delivery of raw cane sugar, free-on-board the receiver's vessel to a port within the country of origin of the sugar.

How many pounds is a sugar contract?

One Sugar No. 11 contract represents 112,000 pounds of raw cane sugar. The quality that is acceptable for delivery is raw centrifugal cane sugar based on 96 degrees average polarization. This just means the sugar has been processed through a centrifuge in a certain way.

How much do I need to buy a futures contract?

Some small futures brokers offer accounts with a minimum deposit of $500 or less, but some of the better-known brokers that offer futures will require minimum deposits of as much as $5,000 to $10,000.

What is a typical futures contract?

A futures contract is a legally binding agreement to buy or sell a standardized asset on a specific date or during a specific month. Typically, futures contracts are traded electronically on exchanges such as the CME Group, the largest futures exchange in the United States.

Where can I trade sugar futures?

Sugar futures are traded at the InterContinental Exchange (ICE) in contract months January, March, May, July and October. Sugar futures are traded under the name sugar no. 11, with prices quoted in U.S. dollars per pound, and a minimum fluctuation of $0.0001 per pound.

What are the different types of sugar futures?

There are two different types of sugar futures contracts available to trade, raw sugar and white sugar. Raw sugar is the product of a few simple processing steps applied to sugar cane juice. White sugar, on the other hand, can be either white beet sugar, cane crystal sugar or raw sugar which has been heavily processed.

Can you buy stock in sugar?

Sugar industry stocks in 2024

Those seeking to invest in sugar stocks need to take a unique approach. That's because no pure sugar-producing companies trade on major U.S. stock exchanges. Instead, a couple of companies produce sugar along with other agricultural products or as part of a diversified portfolio.

Why does the United States pay twice the world price for sugar?

In 2022 U.S. consumers, including food manufacturers, paid twice the world price for sugar. Nearly half of U.S. imports of sugar come from Mexico, and according to studies these imports have a significant effect on the U.S. market. Beginning in 2008, sugar imported from Mexico became duty-free and quota-free.

How to invest in sugar futures?

Why does the US pay more for sugar?

Thanks to the tariff-rate quota, or TRQ, levied by the U.S. sugar program, American consumers also pay more than double for the commodity compared to the rest of the world. The TRQ charged by the U.S. sugar program allows the country to import a certain amount of sugar at a low tariff rate.

How do you trade sugar?

Sugar is often traded using futures – contracts in which you agree to exchange a set amount of the underlying commodity at a set price on a set date. These contracts are traded on futures exchanges, such as the Intercontinental Exchange (ICE).

How much does sugar cost to make?

As listed in Table 1, the production costs of the corn dry-grind process range from 0.22 to 0.33 $/kg sugar. The biggest portion of the production costs (>80%) is the material costs (mostly feedstock) followed by the utility costs.

Can I trade futures with $100?

This can be a risky form of trading, but it also has the potential to generate large profits. If you are starting with a small amount of capital, such as $10 to $100, it is still possible to make money on futures trading.

Why would someone buy a futures contract?

A futures contract allows an investor to speculate on the direction of a security, commodity, or financial instrument, either long or short, using leverage. Futures are also often used to hedge the price movement of the underlying asset to help prevent losses from unfavorable price changes.

Can anyone buy a futures contract?

However, you should remember that when trading with margin, your end profit or loss is determined by the full size of the position, and not just the margin required to open it. Can anyone trade futures? Yes, anyone can trade futures.

How risky are futures contracts?

Yes, it is possible to lose more money than you initially invested in futures trading. This is because futures contracts are leveraged, which means you can control a large position with a relatively small amount of investment upfront. 9 While leverage can amplify your gains, it can also magnify your losses.

What is the most popular futures contract?

How long do futures contracts last?

And unlike stocks, futures contracts do expire. The expiration date is the last day a contract can be traded, and expiration cycles can be monthly or quarterly. Keep in mind that different products follow different expiration cycles.

Who dominated the sugar trade?

Although the sugar trade in the Americas was initially dominated by the Portuguese Empire, the Dutch–Portuguese War would cause a shift which would have knock-on effects for the further growth of the sugar trade in the Caribbean and particularly the production of rum (made from sugar cane juice).

What is the sugar trade known for?

The demand for sugar drove the transatlantic slave trade, which saw 10-12 million enslaved people transported from Africa to the Americas, often to toil on sugar plantations. This voyage was called the Middle Passage, and was notorious for its brutality and inhumaneness.

Do farmers sell futures contracts?

Farmers use futures contracts to secure a price and to protect price risks. For example, a corn producer may decide to sell a corn futures contract in May, after planting is completed, for December delivery.

What is the open interest on the sugar futures?

Basic Info. ICE Sugar Futures Open Interest is at a current level of 819781.0, N/A from last week and down from 929179.0 one year ago. This is a change of N/A from last week and -11.77% from one year ago.