International markets were marked by heightened volatility over the month, according to Piraeus Bank’s 10th Agricultural Products Price Bulletin for 2026.
Investor sentiment is being shaped by the return of inflation concerns, fiscal pressures in the eurozone and doubts about the financing of artificial intelligence. Although stronger-than-expected US inflation initially fuelled expectations of further tightening by the Federal Reserve, concerns about artificial intelligence and a search for safe havens led US bond yields to ease.
In the eurozone, political and fiscal concerns in France strengthened the dollar against the euro. The stronger dollar also weighed on metals, particularly precious metals, while emerging markets suffered even steeper losses amid pressure on Asian technology stocks and Lula’s surprise victory in Brazil. In the energy sector, a lack of progress in US-Iran talks and disruption to flows through the Strait of Hormuz kept oil prices high, despite the G7 releasing strategic reserves.
In contrast to the broader commodities index, which rose, the agricultural commodities index fell. Wheat, soybean, orange juice and corn prices declined. By contrast, sugar, rice, cotton and cattle prices rose.
The picture remained mixed: ample grain supplies eased concerns about shortages, while climate risks left the market vulnerable, particularly in soft commodities (sugar, cotton and orange juice).
In the period ahead, attention will turn to the progress of the harvest and weather conditions in major producing regions. Developments in El Niño will be particularly important. According to the NOAA, the phenomenon continues to strengthen, with a more than 83% probability of it becoming strong to very strong by the first quarter of 2027.
Together with higher production and transport costs resulting from elevated energy prices, the balance of risks remains tilted to the upside. For individual products, ample supply could limit upward pressure on wheat and corn, although tensions in the Black Sea and historically low EU corn production (1994/95) are supportive factors.
For soybeans, lower palm oil production and strong demand for biofuels are expected to support prices, while potential weather disruptions in India and Brazil remain the main upside risk for sugar.
For rice, uncertainty over rainfall in Asia due to El Niño limits the scope for prices to fall. In orange juice, weaker demand and high inventories are curbing gains, although weather-related risks remain.
For cotton, a production shortfall relative to consumption creates upside risk, which Brazilian supply could temper. Finally, limited cattle supply is supporting prices, but higher imports and weaker demand from Asia could limit gains.
The agricultural commodities index fell by 7.60% month on month, in contrast to the commodities index, which rose by 2.70%. The decline can be attributed mainly to losses in grains (corn, wheat and soybeans), which carry greater weight in the index.
Ample supply and larger harvests, combined with a stronger dollar, dampened international demand. Further dollar appreciation, driven by tighter Fed monetary policy, could also weigh on prices by curbing demand. On the other hand, climate risks in major producing regions remain elevated, leaving prices exposed to upside risks. Volatility could therefore remain high in the period ahead, with trends varying across individual markets.