Porto Alegre, April 7th, 2026 – International sugar prices in New York remain fragile, supported only by oil and international geopolitical risk; the drop in Brazil’s sugar production and exports is not expected to sustain gains in New York; the USDA should publish its first global estimate only at the end of May; hydrous ethanol continues to post strong arbitrage gains over sugar; an important bearish chart pattern reinforces downward pressure on sugar prices.
The month of April, now at its beginning, brings with it not only the start of the new 2026/27 sugarcane crop in Brazil’s Center-South, but also an important set of new developments in the sugar and ethanol market that we will try to anticipate in this edition of Visão Agro Açúcar & Etanol. The first point, which we have already been anticipating since early March, is the support for sugar prices above 14 cents solely due to geopolitical risk vectors and oil. This is a very dangerous support vector for sugar, given the high degree of ephemerality in the behavior of oil and in the global geopolitical risk aversion climate.
The current war between the United States and Israel against Iran has shown itself to be very uncertain in the pricing of international geopolitical risks through oil, which leaves the only support base for raw sugar in New York on an exponentially fragile support base as well. It is no coincidence that from the end of March to the beginning of April prices began a downward spiral that unifies not only the fragility of oil and of external gains relative to its fundamentals, but also the formation of a very important and well-known chart pattern in the market.
Bump and Run or Spike Up followed by Spike Down
As we mentioned earlier, sugar only managed to move out of the dramatic range between US$/cents 13.50 and US$/cents 14.50 due to the outbreak of the war involving Iran. Without this external vector unrelated to the sugar market, May/26 would still be trapped within this very clear and solid trading range. However, when it did break out, it carried out this upward move in a very intense way, with exponential gains. At first glance, this seemed very positive for sugar because it took prices inside the mill, under the PVU modality, from a trading range between 5% and 8% below the average production cost of the current 2026/27 crop in Brazil’s Center-South, which ranges between US$/cents 13.40 and US$/cents 13.80, to levels above production cost, between 5% and 7%.
An initial and superficial assessment of the move showed relief for mills that had not yet executed their hedge operations, creating an opportunity, still during March, to at least lock in profit margins of 5% to 7% on the first board, May/26, and between 8% and 10% on the second board, July/26. However, since that period, SAFRAS & Mercado had been warning about the fragility of the move being based only on the rise in oil and about the fact that it was occurring through a Spike Up. This move referred to a chart pattern originally called Bump and Run, which in Portuguese was adapted as Alta em Solavanco.
The Bump and Run is a price appreciation move in futures contracts, and also in the stock market, initially composed of a large and intense jump in prices over a short period of time, usually one week. The theory that analyzes the behavior of this chart pattern indicates that this Spike Up is followed by a consolidation zone at the higher price levels. In other words, prices rise exponentially over a short period of time and then stabilize at the top for another week. The major detail is that after one week this zone of stability is succeeded by a Spike Down that gives back all of the gains obtained in the Spike Up that began at the end of March and is now underway in the first week of April.
The downward move had been flagged by SAFRAS & Mercado
Here it is important to point out that SAFRAS & Mercado warned about each of these phases, especially the consolidation zone at the top that had already formed at that time, both in its daily report, Agro Hoje Açúcar & Etanol, and through direct contact with its consulting clients, in order to anticipate the strong downward move that was already taking shape and is now ongoing in this first week of April. In this regard, SAFRAS & Mercado warns that for May/26 the first target to be reached is the US$/cents 14.65 region. After US$/cents 14.65 there is the natural support at US$/cents 14.50, which we believe will be ignored by the ongoing downtrend, which will be of strong intensity. After that, we have the base of the initial move, which is the US$/cents 14.00 range, an important natural and psychological support.
It is still too early to state that the 14-cent line will be broken and that new moves below it will resume. We have the context of lower sugar production and exports by Brazil in the current 2026/27 crop, which may stabilize prices around this 14-cent low. However, we still have ahead the update of the first 2026 issue of the USDA’s semiannual global sugar supply and demand report, to be published at the end of May. This report will very likely bring a global surplus between supply and demand of around 10 million tons, with an 80% chance, in the view of SAFRAS & Mercado, that the surplus will remain close to the 10 million ton line.
The basis confirms the reduction in sugar supply in 2026/27
Despite the decline in external prices, the current 2026/27 crop in Brazil’s Center-South is marked by an important drop in sugar production and exports. And this reduction in supply has already been seen in export premiums, which are showing atypically positive levels for this time of year. SAFRAS & Mercado projects sugarcane crushing at 620 million tons, up 3.68% from the 598 million seen in the previous season. Despite the increase in crushing, sugar production is expected to decline 7.5% in the new 2026/27 crop, falling from 40 to 37 million tons.
This drop in sugar production will be equally reflected in exports, which are expected to decline by around 14.20%, from 33.80 to 29 million tons. This fall in supply is reflected in export premiums. For April shipments, premiums range between US$/cents +0.35 and US$/cents +0.68, with average trades being recorded at US$/cents +0.52. Shipments for May range between US$/cents +0.18 and US$/cents +0.25, with average trades observed around US$/cents +0.23. For June shipments, indications have been seen between US$/cents +0.07 and US$/cents +0.02. Historically, export premiums in these months trade in negative territory, between US$/cents -0.20 and US$/cents -0.10.
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