The latest FAO Food Price Index was released this week, rising slightly from February but well below levels in March 2015. Sugar prices and vegetable oil prices rose sharply in March, but this change was offset by declines in dairy prices.

The Cereal Price Index remained generally unchanged in March at 147.6 points. This is still significantly below March 2015 levels. Wheat prices averaged slightly lower due to strong competition and a favorable supply outlook. Maize prices also fell slightly due to good production prospects, weak import demand, and higher than expected planting outlooks in the US.

The Vegetable Oil Index, on the other hand, reached a 15-month high at 159.8 points. This rise was driven mainly by palm oil, which surged following dry weather in Malaysia and Indonesia. Soy oil prices remained largely unchanged in March.

The latest AMIS Market Monitor was also released this week. The report contains the first forecasts for wheat, rice, soybean, and maize supply and demand in 2016-2017; these estimates suggest that this season will again be characterized by large supplies and slow-growing consumption rates. However, 2016 wheat production is expected to fall behind 2015 levels and will likely not be enough for 2016-2017 utilization; thus, global ending stocks are expected to decline by 5.3 percent to a three-year low.

Maize ending stocks could also fall by 5 percent but are expected to remain above the five-year average. Maize production is also expected to increase slightly, driven by outputs in the EU, Ukraine, and US. Low global maize prices are likely to stimulate higher use for feed and industry.

Rice production is also expected to expand slightly, but ending stocks will be contracted, as use by India and Thailand could offset build-ups in China and South Korea. Soybean ending stocks, meanwhile, are expected to exceed last season's all-time high by over six percent. This jump is driven by higher than expected output in Argentina, Uruguay, and Brazil.

The report also finds that the current El Niño cycle is declining from its peak strength. Neutral conditions are expected to continue until June, but the negative impacts of the cycle continue to be felt throughout the world.

The AMIS Market Monitor provides a monthly synopsis of major developments in international commodity markets, focusing on wheat, maize, rice and soybeans. It represents the collective assessment of the ten international organizations that form the AMIS Secretariat concerning the international market situation and outlook.

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