Looking to the Futures

Sugar futures (/SB) have seen increased intraday volatility in recent sessions, even as prices remain near levels seen six months ago. Bulls and bears continue to battle for control as the market weighs competing food-versus-fuel demand signals.

The bullish case centers on sugar’s role in ethanol production, where stronger crude oil prices could encourage mills to divert more sugarcane toward fuel. The bearish argument points to improving monsoon rainfall in India, which could support the country’s sugarcane crop and reduce concerns about a global supply deficit.

For sugar bulls, higher crude oil prices could increase demand for renewable fuels such as ethanol and biodiesel. That dynamic may encourage sugarcane processors to allocate more cane to ethanol production instead of food-use sugar.

Brazil, the world’s leading sugar producer, is already showing signs of that shift.

UNICA, Brazil’s sugarcane and bioenergy industry association, reported that 2026/27 Center-South sugar production totaled 6.838 million metric tons through May, down about 2% year over year, as mills dedicated a larger share of cane crushing to ethanol production.

If crude oil prices continue to climb, Brazil’s mills may have further incentive to favor fuel production, potentially limiting sugar output even if overall cane crushing remains strong.

On the bearish side, India—the world’s second-largest sugar producer—is seeing some improvement in seasonal monsoon rainfall, which could help stabilize crop expectations.

India’s Meteorological Department reported that cumulative monsoon rainfall was 23% below normal as of mid-July, a notable improvement from the more than 42% deficit reported at the end of June. If rainfall continues to recover, analysts may begin raising India’s 2026/27 cane harvest projections, which could ease concerns about the size of this year’s global sugar deficit.

This morning, U.S. stock index futures moved higher in the early hours with the S&P 500® (+0.52%), the Nasdaq-100® (+1.37%), the Russell 2000® (+0.73%), and Dow Jones Industrial Average® (+0.31%) all in the green.

In Asia, major indexes closed mixed, with the Nikkei (+3.26%) and the Shanghai (+1.79%) higher, but the Hang Seng (–0.04%) posting losses. 

European trading saw the DAX (+0.47%), the CAC (+0.30%), and the FTSE (+0.35%) markets move higher by midday.

Heating Oil futures (/HOU26) started the week higher (+1.34%), even as crude oil and gasoline prices moved lower Monday. The strength was supported by a tight distillate supply backdrop, with U.S. inventories more than 11% below the five-year average. Global diesel supply concerns also remain in focus after Russia, the world’s second-largest diesel exporter, implemented export bans amid domestic shortages, with Ukrainian drone attacks disrupting production at several major Russian refineries.

Live Cattle futures (/LEQ26) finished Monday’s session higher (+0.94%) as short-covering finally emerged after a record 15 consecutive lower closes in the front-month contract. The recent sell-off was driven by falling cash cattle prices and commodity fund long liquidation, with weaker boxed beef values keeping meat packers cautious about bidding aggressively for market-ready cattle while profit margins remain under pressure.

Soybean futures (/ZSX26) closed higher Monday (+1.93%), with the new-crop November contract reaching fresh contract highs to start the week. Weather remains the primary driver, as extended forecasts are turning hotter and drier heading into August—a critical period for U.S. soybean development and yield potential.

Major economic reports, trading events, and news items that could potentially impact specific futures markets:

ADP Weekly Employment Change (stock indices and interest rates)

Futures last trading day: August Crude Oil

6-week T-bills

New futures products are available to trade with a futures-approved account on all thinkorswim platforms: 

• Ripple (/XRP)
• Micro Ripple (/MXP)
• 100 OZ Silver (/SIC)
• 1 OZ Gold (/1OZ)
• Solana (/SOL)
• Micro Solana (/MSL)

Visit the Schwab.com Futures Markets page to explore the wide variety of futures contracts available for trading through Charles Schwab Futures and Forex LLC.