Agricultural commodity prices trended downward in June, as the strengthening of the dollar, expectations of more moderate global growth, and improved supply prospects created downward pressure on prices, according to Piraeus Bank’s monthly agricultural products newsletter.
As noted in Piraeus Bank’s report, the market was influenced by the “higher for longer” interest rate policy, while investors appear more cautious regarding the outlook for the global economy.
The strengthening of the dollar mainly reflects expectations that the U.S. economy remains more resilient than other major economies, as well as that interest rates will remain at higher levels for a longer period of time compared to the Eurozone.
In the bond market, stability in short-term yields, combined with a mild decline in long-term yields, suggests that markets are beginning to price in a scenario of milder economic activity and a gradual decline in inflation. Equity markets remained on a positive trajectory thanks to strong corporate earnings and the continued momentum in the technology sector.
In contrast, the broad decline in commodities reflects weakening expectations for global demand and pressure from the strong dollar, with energy facing the greatest pressure, further exacerbated by expectations of a potential de-escalation following the upcoming “fragile” framework agreement between the U.S. and Iran.
Overall, in June, the market was driven by the “higher for longer” trend in interest rates and a gradual shift toward a more cautious assessment of global growth.
Despite the positive momentum in international capital markets, the trend in agricultural commodity markets was downward, with the agricultural commodities index declining and the majority of individual products posting negative returns. This can be attributed to a combination of improved supply prospects and more subdued demand. The exceptions were cattle and orange juice prices, which rose.
The outlook by product according to the USDA
The latest USDA report confirmed the widening divergence among agricultural commodity markets. On the one hand, improved supply conditions in key producing countries—particularly for wheat—have limited upward pressure; however, the recent heat waves in Europe may heighten concerns about production.
On the other hand, demand remained selectively strong—mainly for corn, due to exports and growing use for ethanol—but did not fully offset the increased supply. Soybeans traded at more balanced levels, supported by expectations of increased demand, particularly with China’s return to the market, although volatility is likely to remain high. Cotton is showing more positive momentum, with global consumption expected to exceed production, bolstering its prices.
Beyond grains, investor interest is increasingly shifting toward “soft” commodities that are sensitive to weather conditions. Despite the decline in sugar prices due to strong production in Brazil, estimates indicate that the global surplus could be reduced if the risks stemming from the already established El Niño phenomenon intensify, according to NOAA, during the winter of 2026–2027, negatively affecting production in India and Thailand and supporting prices.
Overall, the market is shaped by two key trends: ample supply and subdued momentum in grains, versus increased weather risks and selective opportunities in the most sensitive agricultural products.
Although the commodity index recorded a sharp decline on a monthly basis (-12.23%), the agricultural products index limited its decline to 4.45%. The decline in the commodities index is mainly attributed to the sharp correction in the energy sector, resulting from expectations of a potential framework agreement between the U.S. and Iran.
In contrast, the performance of the agricultural commodities index is due to its distinct dynamics, as it is determined to a greater extent by its fundamentals and less by broader market developments. Furthermore, the strengthening of the dollar weighed on price trends, though it did not fully offset the forces of supply and demand.
The Agricultural Product Price Bulletin, produced for Piraeus Bank’s Agricultural Sector by the Economic Analysis & Investment Strategy Unit, is aimed at an extremely broad audience active in the agri-food sector.
* Attached on the right in the column is the 6th Piraeus Agricultural Product Price Bulletin for 2026.