An increased willingness to take risks prevailed in global investment community on a monthly basis. Equity markets posted gains as economic activity in the US remained broadly strong, with signs, however, of some slowing, with corporate results beating market expectations.

This dynamic had an effect positively the dollarbut also the bond yields (2-year and 10-year) that were strengthened. In the Eurozone, economic data still point to very subdued growth, with problems in manufacturing persisting. At the Central Bank level, both the ECB and the Fed are expected to continue their monetary easing as inflationary pressures continue to ease, including energy price developments, with the market pricing in two more cuts for the Fed and a still for the ECB, until the end of the year.

Positive sentiment in international capital markets influenced the agricultural commodities index, which continued to post gains for the second month in a row, with returns for all individual agricultural commodities in positive territory. According to the existing NOAA data, the conditions for the La Niña phenomenon are expected to be favorable for the current period (September-November 2024) with a 60% chance and is estimated to remain active until January-March 2025.

Although market concerns about shrinking wheat production and geopolitical risk remain bolstering wheat prices, managers are keeping short positions high, due to limited Chinese demand and the improvement of weather conditions in producing countries. For sugar, the existence of adverse weather conditions (recurrence of La Niña) in Brazil is likely to continue to favor its price.

Possible increased imports of corn into China from the US, due to possibly reduced Chinese production, is expected to boost its price, with managers reducing short positions, similarly for soybeans due to increased US export sales to China. For orange juice, the continuation of negative challenges in the production of oranges (hurricanes, diseases, La Niña), may work supportively in its prices. Cotton short positions are likely to remain at a high level due to China’s weak image, but also a reduced global growth rate. For cattle, the forecasts for a possible limitation of the supply of cattle and the strengthened demand, may work beneficially in their prices. Increased rice production in major Asian countries could weigh on rice prices, as could subdued demand as a result of easing restrictions on Indian rice exports.

It moved upwards for the second month index of agricultural products (+0.78%), with the commodity index, however, showing a greater increase (+1.60%). As possible reasons for the above differentiation, the evolution of data from China can be mentioned, maintaining, however, a moderate growth rate, alongside the recent measures to support the Chinese economy, despite the positive dynamics of the dollar. In addition, concerns about the possible transition to La Niña, burdening crops, and geopolitical risks, were two possible catalysts for the above diversification. At the same time, the technical picture of the index remains relatively positive.