diff --git a/CHANGELOG.md b/CHANGELOG.md
index 5760e39f19fc..3219f9bb6186 100644
--- a/CHANGELOG.md
+++ b/CHANGELOG.md
@@ -1,5 +1,9 @@
 # Main (unreleased)
 
+- [BUGFIX] Do not immediately cancel context when creating a new trace
+  processor. This was preventing scrape_configs in traces from
+  functioning. (@lheinlen)
+
 - [FEATURE] Operator: The Grafana Agent Operator can now generate a Kubelet
   service to allow a ServiceMonitor to collect Kubelet and cAdvisor metrics.
   This requires passing a `--kubelet-service` flag to the Operator in
diff --git a/pkg/traces/promsdprocessor/prom_sd_processor.go b/pkg/traces/promsdprocessor/prom_sd_processor.go
index 97e31dba648c..47dd6f30479b 100644
--- a/pkg/traces/promsdprocessor/prom_sd_processor.go
+++ b/pkg/traces/promsdprocessor/prom_sd_processor.go
@@ -40,7 +40,6 @@ type promServiceDiscoProcessor struct {
 
 func newTraceProcessor(nextConsumer consumer.Traces, operationType string, scrapeConfigs []*config.ScrapeConfig) (component.TracesProcessor, error) {
 	ctx, cancel := context.WithCancel(context.Background())
-	defer cancel()
 
 	logger := log.With(util.Logger, "component", "traces service disco")
 	mgr := discovery.NewManager(ctx, logger, discovery.Name("traces service disco"))
@@ -54,6 +53,7 @@ func newTraceProcessor(nextConsumer consumer.Traces, operationType string, scrap
 
 	err := mgr.ApplyConfig(managerConfig)
 	if err != nil {
+		cancel()
 		return nil, err
 	}
 
@@ -62,6 +62,7 @@ func newTraceProcessor(nextConsumer consumer.Traces, operationType string, scrap
 	case "": // Use Upsert by default
 		operationType = OperationTypeUpsert
 	default:
+		cancel()
 		return nil, fmt.Errorf("unknown operation type %s", operationType)
 	}