There was a downward trend in agricultural products in June, as the strengthening of the dollar, expectations for milder global growth, and improved supply prospects shaped a pressuring environment for prices, according to Piraeus' monthly agricultural products bulletin.
As noted in the Piraeus report, the market moved under the influence of the policy of high interest rates for a longer period of time ("higher for longer"), while investors appear more cautious regarding the prospects of the global economy.
The strengthening of the dollar mainly reflects expectations that the US economy remains more resilient compared to 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 the mild easing in long-term maturities, 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 results and the continued momentum of the technology sector.
By contrast, the broad decline in commodities reflects the weakening of expectations for global demand and pressure from the strong dollar, with energy facing the greatest pressures, additionally due to expectations for possible de-escalation with the upcoming "fragile" framework agreement between the US and Iran.
Overall, in June the market moved with the axis of "higher for longer” in interest rates and a gradual shift toward a more cautious assessment of global growth.
Despite the positive momentum of international capital markets, the trend in agricultural product markets was downward, with the agricultural commodities index declining and the majority of individual products recording negative returns. This can be attributed to a combination of improved supply prospects and more restrained demand. The exception was the prices of cattle and orange juice, which strengthened.
The picture by product according to the USDA
The latest USDA report confirmed the widening divergence between agricultural product markets. On the one hand, the improvement in supply conditions in key countries, particularly in wheat, limited upward pressures; however, the recent heatwaves in Europe may intensify concerns about production.
On the other hand, demand remained selectively strong -mainly in corn, due to exports and increasing use for ethanol- but without fully offsetting the increased supply. Soybeans moved at more balanced levels, supported by expectations of increased demand, particularly with the re-emergence of China, although volatility will likely remain elevated. Cotton shows more positive momentum, with global consumption expected to exceed production, supporting its prices.
Beyond grains, investment interest is increasingly turning toward "soft" commodities that are sensitive to weather conditions. Despite the decline in the price of sugar due to strong production in Brazil, estimates show that the global surplus could be limited if the risks arising from the already formed El Niño phenomenon intensify, according to NOAA, during the winter of 2026-2027, negatively affecting production in India and Thailand and acting in favor of prices.
Overall, the market is being shaped around two main trends: supply adequacy and restrained momentum in grains, versus increased weather risks and selective opportunities in more sensitive agricultural products.
Although the commodities index recorded a sharp downward course on a monthly basis (-12.23%), the agricultural products index limited the decline to 4.45%. The downward course of the commodities index is mainly attributed to the sharp correction recorded in the energy sector, as a result of expectations for a possible framework agreement between the US and Iran.
By contrast, the course of the agricultural products index is due to its differentiated dynamics, as these are determined to a greater extent by their fundamentals and less by broader developments. In addition, the strengthening of the dollar acted as a burden on price developments, without however fully offsetting the forces of supply and demand.
The Agricultural Product Price Bulletin, which is prepared for Piraeus' Agricultural Sector by the Economic Analysis & Investment Strategy Unit, is addressed to an exceptionally broad audience active in the agri-food sector.
* Attached on the right in the column is accompanying material, the 6th Agricultural Product Price Bulletin for 2026, by Piraeus.