Monthly Agricultural Product Price Bulletin from Piraeus Bank (April 2024)

Reduced risk appetite prevailed in the global investment community, on a monthly basis, with equity markets recording losses due to increased geopolitical risk and a further delay in the start of monetary easing by the Fed.

Economic data from the US economy maintained a positive momentum, with the labor market remaining strong, despite a resilient picture of inflation. Amid this environment, the dollar strengthened, as did yields on the 2-year and 10-year US Treasuries. In the European economy, further containment of inflation is likely to pave the way for the ECB to make its first interest rate cut in June, with labor market conditions remaining particularly good, while problems in manufacturing continued to be a concern.

The negative climate in the international capital markets did not seem to affect the agricultural products index which strengthened slightly, while the individual returns of agricultural products presented a mixed picture. The biggest gains were made by the prices of rice, orange juice and wheat, while significant losses were recorded by the prices of cotton, sugar and to a lesser extent soybeans and cattle.

According to NOAA, forecasts for El-Ninio are estimated to be milder through April-June 2024 (85% probability), with a chance (60%) of La-Ninia developing through June-August 2024, affecting crops of South America, without yet having been discounted to their prices. Signs of normality in the wheat market may reverse due to geopolitical risks, putting its price on an upward trajectory. For sugar, upward pressure on its price as a result of adverse weather conditions is likely, affecting production prospects. “Oversold” levels in the corn price are acting as a support for its price, however reduced Chinese imports are likely to have a negative impact. For orange juice, production cuts are likely to boost its price, but its high valuation level raises concerns about its price trajectory. Increased Indian cotton production is likely to limit the upward trajectory of cotton prices, despite continued Chinese imports. For soybeans, the uncertainty that still exists around global supply levels may have a negative effect on its price. Limited production and export activity may maintain the high level in cattle prices, a trend that is likely to reverse due to the high level of valuation. For rice, the prospects of enhanced Indian rice production may have a negative impact on its price.

On a monthly basis, both the commodity index (+0.61%) and the agricultural products index (+0.64%) moved slightly upward, despite disappointing data on commodity transactions (significant decline in imports-exports) in China . However, growth-related risks remain to the downside, given geopolitical uncertainty, with the dollar’s positive momentum likely to be maintained, at the same time limiting the upside in agricultural prices.

The Agricultural Product Price Bulletin, which is implemented for the Agricultural Sector of Piraeus Bank by the Economic Analysis & Investment Strategy Unit, is aimed at an extremely wide audience, active in the agri-food sector.

The 4th Agricultural Products Price Bulletin for 2024, of Piraeus Bank

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