Agri Commodity Markets Research June 2024: Under pressure

The S&P GSCI Agriculture Index declined an astonishing 9.6% MOM, with steep losses across the grain and oilseed complex. Northern Hemisphere harvest pressure, US dollar strength (DXY +1.4% MOM), US-China trade war winds, and signs that Russian wheat yields may not be as bad as initially thought explain recent price action. However, risks still remain, especially since Black Sea rainfall continues to be patchy and La Niña waits around the corner. For softs, price action was mixed. ICE #11 Sugar futures found support (+3.8% MOM), as disappointing Brazilian May harvest results raised questions about the size of the crop. For cocoa, futures trended down in June, likely a consequence of West African rainfall, low open interest, and speculative profit taking.