Weather conditions start to take centre stage

With eyes now starting to focus on the new crops in the Northern Hemisphere, changes in weather conditions have underpinned fluctuations in many agricultural commodity prices in recent weeks. In particular, wet weather in the US has both improved the outlook for the winter wheat crop but also hampered planting progress of other crops. At the same time, rains in Brazil look set to boost this year’s sugar cane harvest, potentially adding more woes to an already over-supplied global market. That said, commodity prices also remain tuned into changes in major currencies. A rebound in the Brazilian real helped lift the price of Arabica, which has been the best performing commodity since the middle of last month. At the other end of the spectrum, lumber continues to suffer as a result of poor US housing starts.