In August the Bloomberg Agriculture Spot Index climbed to its highest level since mid-2023, having risen almost 14.5 per cent since early July. RaboResearch general manager Stefan Vogel said this has come as rising geopolitical and weather-related risk factors have supported global prices across the agricultural ‘complex’.

Mr Vogel said disruptions to fuel, fertiliser and grain flows in the Middle East and the Black Sea show little sign of normalising, which points to further event-driven market volatility and suggests farm input prices could grind higher.

“Low water levels in the Danube and Rhine rivers have added to logistics costs in Europe, as well as further constraining Ukraine’s scope to re-route exports away from its Black Sea port of Odessa, which – due to Russian attacks – is unable to receive and load ships,” he said.

As a result of Odessa being out of action, Mr Vogel said Ukrainian grain exports have dropped to less than half a million tonnes, or less than 15 per cent of the approximately four million tonnes normally shipped per month. In addition, Russian grain exports dropped by 30 per cent in July and likely even more in August, due to war disruptions to its export ports.

For wheat, the Rabobank analyst said the CBOT December ’26 wheat contract rose 20 per cent in the month to August and 30 per cent since early July, supported largely by concerns about mounting export disruptions in the Black Sea.

“US corn and soybean crop conditions have continued to deteriorate, tightening the corn ‘balance sheet’, and the European Commission’s latest estimates point to corn yields in France being almost 30 per cent below the five-season average due to drought.

“Providing a counterweight to the recent bullish turn, global grain and oilseed balances remain broadly comfortable. The USDA, for instance, sees US old-crop corn stocks at a six-season high, while last season’s bumper wheat harvests in most major exporters have added to opening inventories.”

However, Mr Vogel said, the critical question is the extent to which available supplies prove accessible with large volumes of Russian and Ukrainian grain exports from the current harvest underway heavily disrupted by war.

“Meanwhile, El Niño concerns have become firmly embedded in soft commodity markets, influencing recent shifts in speculative positioning of funds at major commodity exchanges.”

The August El Niño–Southern Oscillation (ENSO) update from the US-based National Oceanic and Atmospheric Administration (NOAA) assigned a 69 per cent likelihood to the ongoing El Niño developing into the strongest since records began (in 1950) by Q4 2026.

Mr Vogel said corn prices have risen on the back of US supply risk, with CBOT December corn futures rising 15 per cent in August and 23 per cent since early July. As well as concerns about US crop conditions, lower EU corn production and Black Sea export disruptions provided price support.

“Estimates of record South American corn production, however, may temper the bullish impact of tighter US stocks and Black Sea disruptions.

“The global soybean market is focused on weather as the US harvest approaches, with September conditions to shape production prospects, but a record crop still on the cards.

“Global rapeseed production in 2026 is estimated at a record 95 million tonnes, up two million tonnes year-on year, supported by a record Canadian crop, as well as a recovery of Ukrainian and Russian production volumes from last year. Australian and EU-27 output, though, is seen down on the prior year,” he said.

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