Supply concerns overshadow dollar weakness

Weakness in the US dollar and rising oil prices would normally be considered positive for agricultural commodity prices. However, despite a 3.5% fall in the value of the US currency and a 5% rise in the price of Brent crude since the middle of April, most agricultural commodities prices have still fallen over the same period. In many cases, fundamentals have returned to the driving seat, at least for now. Concerns that Ghana’s cocoa harvest will be significantly lower than last year sent the price of cocoa soaring. Similarly, fears about the impact of storms in key US wheat-growing areas led to a sharp rebound in the price of wheat. At the other end of the scale, the prospect of ample corn and sugar supplies this year have helped to drag their prices lower.