Positive sentiment towards agriculturals fades

Abundant supplies of many agricultural commodities and concerns about weak demand are likely to be behind the general deterioration in sentiment towards agriculturals in recent weeks. Indeed, there has been a strong shift down in the futures curves for cocoa, soybeans and wheat over the last month. Moreover, agricultural prices continue to be weighed down by the lower price of oil and the strengthening US dollar. That said, the recent stability in the oil price, and indeed a move higher in recent days, should benefit agricultural commodities for which biofuel production is a key source of demand.