In the sharpest rise seen since mid-2012, the FAO Food Price Index increased by 5.2 points, or 2.6 percent, in February. The rebound was driven by rising prices across all sectors of the Index, with the exception of meat. Despite this rise, however, the February Index remained 2.1 percent lower than one year ago.

The Cereal Price Index rose 3.6 percent in February, the strongest rise seen since July 2012. Concerns of the US wheat harvest, as well as strong demands for grains for both feed and biofuels, contributed to the increase. Cereal prices remain well below their February 2013 levels, however.

The Vegetable Oil Price Index also rose by 4.9 percent, driven by concerns over the impact of unfavorable weather in Southeast Asia (for palm oil) and South America (for soybean oil). The Dairy Price Index and Sugar Price Index rose by 2.9 percent and 6.2 percent, respectively, due in part to weather concerns. The Meat Price Index was the exception this month, remaining generally unchanged since January.

The latest AMIS Market Monitor was also released this week. The report predicts high world stocks for maize, wheat, rice, and soybeans in 2014, despite the expected slowing of exports from the Ukraine. The report's findings dispel some concerns about weather conditions in several major producing areas; in particular, soybean supply is expected to remain favorable despite the poor weather seen in South America over the past few weeks.

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