Soft Commodity Futures: How Coffee, Cocoa and Sugar Actually Trade in 2026

Coffee, cocoa and sugar are the three markets where a weather forecast in one country can reprice a global commodity before the US session opens. They are small relative to crude or the index complex, they are physically settled, and they have a habit of moving in ways that make sense only if you know where the crop actually grows.

Soft commodities trading covers the agricultural products that are grown rather than mined. The benchmark contracts for coffee, cocoa and sugar all trade on ICE Futures U.S., and each one has a contract size, a tick value and a delivery mechanism that differs enough from the others to catch a trader who assumes they are interchangeable.

In this guide we will define what separates a soft from a hard commodity, lay out the specifications of the three benchmark contracts side by side, explain what genuinely moves these markets, cover the risk profile that makes softs unforgiving, and be direct about what a trader in a simulated funded futures account should check before putting them on a watchlist.

Key Takeaways

• Read the spec sheet before the chart. Coffee C moves $18.75 per tick, cocoa $10.00 and Sugar No. 11 $11.20, and those numbers decide your real position size.
• Supply is concentrated, demand is not. A drought or disease event in a handful of growing regions can reprice global supply while consumption barely changes.
• No daily price limit is a feature, not a footnote. ICE lists no daily price limit on both the Cocoa and Sugar No. 11 contracts, so a session has no exchange-imposed ceiling on travel.
• These are physically settled contracts. Delivery mechanics, notice days and origin premiums exist and shape how the front month behaves into expiration.
• Confirm availability before you build a strategy. Softs are ICE products, and a funded futures program's instrument list is set per program.

Table of Contents

• What Makes a Commodity Soft
• The Three Benchmark Contracts
• What Actually Moves Softs
• The Risk Profile Traders Underestimate
• Softs and Your Funded Futures Account

What Makes a Commodity Soft

A soft commodity is grown. A hard commodity is extracted. That single distinction drives almost everything else about how the two groups behave, because a crop has a growing season, a harvest window and a vulnerability to weather that a copper deposit does not.

The softs complex conventionally covers coffee, cocoa, sugar, cotton and orange juice, with some traders including grains and livestock under a broader agricultural umbrella. The three we are focused on here are the three with the deepest global benchmark contracts and the clearest role in day-to-day trading.

Why growth cycles change the trading problem

An oil field can raise or lower output within weeks. A coffee tree cannot. Supply responds to price on a horizon measured in years, not quarters, and in the meantime the only variable that moves quickly is the weather. That is why softs spend long stretches drifting and then reprice violently on a forecast.

The practical consequence for a trader is that the usual mean-reversion instincts are less reliable here. A move driven by a genuine supply shock does not fade because the chart says it is extended. It fades when the supply picture changes, which may be a season away.

Physical delivery is not a technicality

All three benchmark contracts settle by physical delivery. Sugar No. 11 prices the physical delivery of raw cane sugar free-on-board the receiver's vessel at a port in the country of origin. Cocoa prices delivery of exchange-grade product to any of five US delivery ports. That machinery shapes the front month's behavior into notice days and is a good reason for a speculative trader to be out of the front contract well before delivery becomes a live question.

The Three Benchmark Contracts

The three contracts differ in size, quotation and tick value, and none of the three is interchangeable with the others for position sizing. Coffee C covers 37,500 pounds, Cocoa covers 10 metric tons, and Sugar No. 11 covers 112,000 pounds. A single tick is worth $18.75, $10.00 and $11.20 respectively.

Coffee C is described by ICE as the world benchmark for Arabica coffee, quoted in cents and hundredths of a cent per pound with a minimum fluctuation of five hundredths of a cent. Cocoa is quoted in dollars per metric ton with a one dollar minimum move. Sugar No. 11 is the world benchmark for raw sugar, quoted in cents and hundredths of a cent per pound with a one hundredth of a cent minimum move.

Reading the tick value as a risk number

The tick value is not trivia. It is the conversion rate between the chart and your account. A twenty tick adverse move is $375 in Coffee C, $200 in cocoa and $224 in Sugar No. 11 on a single contract. Traders who size by contract count rather than by dollar risk end up carrying three different amounts of risk while believing they carried one.

This is the same arithmetic covered in our guide to tick value and contract specs, and it is more consequential in softs than in most markets because the daily ranges can be wide and because there are no micro-sized versions of these contracts to scale down into.

Specifications as published on the ICE Futures U.S. product pages. Exchanges revise specifications, so confirm the current version before trading.

What Actually Moves Softs

Softs move on supply, and supply moves on weather, disease and policy in a small number of growing regions. That is the whole story in one sentence, and it is why a soft can trend for months on a fundamental that never appears on a US economic calendar.

Consumption of coffee, chocolate and sugar is famously stable. People do not stop drinking coffee because the price rose thirty percent. When demand barely flexes and supply is capable of dropping sharply, price has to do all the adjusting, and it does so with the kind of moves that look irrational on a chart and are entirely rational in a warehouse.

Origin concentration

Each of these markets leans on a handful of producing countries. The ICE cocoa contract makes that visible in its own rules: deliverable growths are divided into groups, with West African origins including Ghana, Ivory Coast, Nigeria, Sierra Leone and Togo carrying a delivery premium over other origins. When the exchange itself has to price origin differences into the contract, that is a signal about where the supply actually comes from.

The trading consequence is that news from one country can matter more than a global aggregate. A rainfall pattern over one growing belt can carry more weight than an entire quarter of demand data.

Currency, freight and the export chain

Producing countries earn dollars and spend local currency. When a producer currency weakens sharply, farmers can be incentivized to sell more into the export market at the same dollar price, and that supply hits a global benchmark quoted in dollars. Freight rates, port congestion and export licensing all add friction that shows up in the spread between origins and the benchmark.

None of this is exotic knowledge, but it is the layer most retail traders skip. If you are going to trade a market where fundamentals dominate, you have to be willing to read fundamentals, or accept that you are trading price action in a market that ignores it periodically.

Positioning data

The CFTC publishes a weekly Commitments of Traders report covering ICE contracts alongside other US futures markets, breaking down open interest by trader category. It is lagged and it is not a timing tool, but it is one of the few free windows into whether a move is being driven by commercial hedgers or by managed money.

The report also gives you a fast read on relative market size. Open interest in Sugar No. 11 runs far larger than in Coffee C or Cocoa, which is one reason sugar tends to absorb a given order with less disturbance than the other two. Reading the ICE section of the report once a week takes a few minutes and builds an intuition for which of the three can actually carry your intended size.

The Risk Profile Traders Underestimate

The specific risk in softs is that a full-sized contract combines a wide daily range with no exchange-imposed daily limit on two of the three benchmarks. That combination means the distance between your entry and a genuinely bad outcome can be larger than the distance you have mentally budgeted for.

Add thin overnight liquidity. Softs trade long sessions, but the depth outside the main hours is a fraction of what an index future carries, so a stop resting through a quiet period can fill much worse than the level you set. This is not a platform failure. It is what happens when a resting order meets a book with gaps in it.

Gaps are the normal case, not the exception

Weather models update overnight. Origin governments announce export measures at their own convenience. A soft can open the US morning several percent away from where it closed, and there is no orderly path in between for a stop to work through. Position sizing has to assume this rather than hope against it.

Traders coming from index futures often carry over an intuition that a stop is a reliable maximum loss. In softs, treat a stop as an intention. The reliable maximum is your position size multiplied by a realistically bad gap.

Softs and Your Funded Futures Account

Whether you can trade coffee, cocoa or sugar in a funded account depends entirely on your program's instrument list. Softs are ICE Futures U.S. products, and many funded futures programs are built around the CME product suite, so availability is a real question rather than a formality. The written terms of your own account are the only place with a reliable answer.

TradeFundrr's futures programs run as Growth Plus and Express paths on NinjaTrader and Tradovate, with manual trading and published risk parameters. Which specific products are enabled is set per program, so check before you build a strategy around a contract you may not be able to trade there.

Why full-sized contracts strain a risk budget

Softs have no micro-sized cousins in the way index futures do. There is no equivalent of stepping down from an E-mini to a micro to fit a smaller account, which our comparison of micro futures and E-mini futures covers in the index complex. In softs, one contract is the smallest unit of risk available, and on a simulated account with a defined daily loss limit and a defined drawdown, one contract in a fast market can consume a meaningful share of both.

That is a legitimate reason to conclude softs are not the right fit for a particular account size, and reaching that conclusion deliberately is a better outcome than reaching it after a breach. The rules in a funded program are not there to be outmaneuvered. They are the constraint the strategy has to fit inside.

What the simulation does and does not reproduce

A simulated account fills against real market data, so the wide spreads, the thin overnight books and the gap behavior all show up the way they would live. What does not happen is the physical side: no delivery notice is ever issued to you, no warehouse receipt changes hands, and no origin premium is ever paid, because no real transaction takes place. Those are live-market events.

That is worth naming honestly rather than glossing over. Delivery mechanics are a live-ready skill the simulated environment exists to help you build, and rolling out of a front month before notice days is a habit worth having before it costs anything. Our guide to futures contract rollover covers the mechanics in more detail.

Frequently Asked Questions

What are soft commodities?

Soft commodities are agricultural products that are grown rather than mined, most commonly coffee, cocoa, sugar, cotton and orange juice. They are distinguished from hard commodities such as crude oil, copper and gold, which are extracted.

Where do coffee, cocoa and sugar futures trade?

The benchmark contracts for all three trade on ICE Futures U.S. Coffee C is the world benchmark for Arabica coffee, the Cocoa contract is the world benchmark for cocoa, and Sugar No. 11 is the world benchmark for raw cane sugar.

What is the contract size for Coffee C futures?

One Coffee C futures contract covers 37,500 pounds of Arabica coffee. The minimum price fluctuation is five hundredths of a cent per pound, which works out to $18.75 per contract per tick.

How big is one tick in cocoa and sugar futures?

Cocoa moves in minimum increments of one dollar per metric ton on a ten metric ton contract, so one tick is $10.00. Sugar No. 11 moves in one hundredth of a cent per pound on 112,000 pounds, so one tick is $11.20.

Why are soft commodities considered volatile?

Supply is concentrated in a small number of growing regions, and a single weather event, disease outbreak or export policy change in one country can move a large share of global supply. Demand, by contrast, changes slowly.

Do softs have daily price limits?

The ICE contract specifications for Cocoa and Sugar No. 11 both list no daily price limit. That means there is no exchange-imposed ceiling on how far the price can travel in a session, which is a meaningful difference from some other futures markets.

Can I trade coffee, cocoa or sugar in a funded futures account?

Only if those products are on your program's instrument list. Funded futures programs publish the products and platforms they support, and softs are ICE products rather than CME products, so check the written terms of your own account rather than assuming.

Are softs a good market for a new futures trader?

They are a demanding market to start in. Thin overnight books, weather-driven gaps and origin-specific news make them unforgiving of oversized positions, so most traders are better served learning contract mechanics on a deeper index or energy market first.

Softs reward preparation more than most markets and punish improvisation more than most markets. Learn the three spec sheets, learn where each crop comes from, size against a plausible gap rather than a hoped-for stop, and confirm the product is even available to you before you spend a month building a plan around it. That order of operations is the whole discipline.