Agricultural Prices

Average agricultural prices fell 4.6% in August following July’s 3.9% decline.

August saw prices decrease for six of the ten commodities tracked by the FocusEconomics panel. Corn, soybeans and wheat traded lower over the past month despite the USDA’s decreased estimates for global supply ahead, as markets had largely penciled in the forecast correction and were also sensitive to reduced global consumption projections. Additionally, favorable weather conditions in Brazil and stable supply expectations from the country further dampened prices for soybeans and coffee. Meanwhile, uncertainty from the Black Sea region eased slightly in August: Ukraine set up a humanitarian corridor for grain shipments, while the EU and the U.S. unveiled plans to boost the country’s export capacity ahead. Lastly, a stronger USD was also bearish for prices. On the flip side, adverse weather conditions in Asia and Africa, the development of the El Niño climatic phenomenon and the imposition of some export restrictions sparked supply concerns—and therefore price rises—for rice, cocoa and sugar.