Rabobank Australia, Media Release, 25 May 2023

So far in May, the S&P GSCI Agriculture Index has declined a modest 0.6% amid the renewal of the Black Sea Grain Initiative (BSGI) and ample grain and oilseed supplies.

The USDA took its first stab at new season supply and demand estimates and painted a bearish picture for soy and corn amid expectations of record US production.

Losses across most G&O markets (-2.6% on average) were largely offset by gains across softs (+2.2%).

A divergence between the two subsets of agri commodities has been an ongoing trend for the past few months.

This can, in part, be attributed to El Niño-induced supply-side concerns and increased fund interest, which is helping drive robusta, cocoa, and sugar futures higher, while many G&O markets face oversupply amid record Brazilian harvest, Russian exports, and the continuation of BSGI.