Favourable weather conditions and firm US dollar put agricultural prices under pressure

Favourable weather conditions towards the end of last week drove down the prices of a whole host of agriculturals, in the US, rainfall brought relief in the Western Grain Belt, e.g. in Nebraska and Iowa. 

In other parts of the country there had already been (excessively) heavy rainfall in recent weeks, but drier and warmer weather is now set to significantly boost the development of corn and soybean plants there. 

The negative price performance of grains and oilseeds was exacerbated by the strong US dollar, which appreciated to a three-month high against a basket of key global currencies on a trade-weighted basis. 

The grain markets in Paris were unable to resist the downward pull of the US markets, especially given that early progress made with the French wheat harvest is giving rise to hopes that the hot and dry conditions of recent weeks may have caused less damage than feared. 

Drier weather in the south of Brazil is facilitating the sugar cane harvest after rainfall in recent weeks had caused delays to harvesting and a lower sugar content in the cane. In conjunction with the strong US dollar, this pushed the raw sugar price on Friday down by 2.5% to just below 12 US cents per pound. 

Weather forecasting services have yet to give the all-clear for Thailand, however, where the weather looks set to remain overly dry in the coming months despite sporadic rainfall.