Agricultural commodity prices rose in July, driven by the El Nino weather event, global drought, and port damage caused by the Russia-Ukraine war.
Wheat prices reached their highest levels since May 2024. At the Chicago Board of Trade, the price per bushel for wheat rose by 8.5% to $7.1125 in July.
Other commodities at the Chicago Board of Trade also saw increases, with corn rising 6.4%, rice by 5%, and soybeans by 3.8%. Soybean prices reached $12.5650 per bushel in July.
At the US-based Intercontinental Exchange, cocoa prices per ton rose by 6.3%, coffee rose by 6.2%, and cotton rose by 5%. Conversely, sugar prices fell by 2.6%.
Climate impacts on supply
In Ivory Coast and Ghana, heavy rainfall has increased the risk of black pod disease, raising concerns about cocoa supply.
Cotton prices have been supported by extreme temperatures in the Xinjiang region, while in India, cotton planting areas have decreased due to climate conditions.
Sugar prices declined due to expectations of a high global sugar supply.
Expert analysis of market drivers
Zafer Ergezen stated that the effects of El Nino are felt in South America, Southeast Asia, and Australia. He noted that high temperatures in major wheat producers Australia, the US, France, and Germany have negatively impacted production expectations.
Ergezen stated that the effect of El Nino is expected to continue until February 2027 and that this effect is seen in products such as cotton, rice, cocoa, and coffee, not just wheat.
Tore Alden, co-founder of the US-based Round Lakes Commodities, stated that strong demand is supporting the wheat market.
Alden also noted that higher than average temperatures in some parts of the US over the last month have increased the possibility of yield loss.
