According to the February FAO Food Price Index released last week, food prices were steady in February but were 14.5 percent lower than in February 2015. The Cereal Price Index fell by 13.7 percent from a year before, led by a 1.5 percent decline in wheat prices due to slower trade activity and the expectation of large exports throughout the rest of the marketing season. Maize prices also fell in February, while rice prices rose slightly.

The Vegetable Oil Price Index, on the other hand, rose by 8 percent in February and reached its highest levels since June 2015. This increase was driven by rising palm oil prices, but soybean oil prices also increased based on predictions that poor palm oil output would increase demand for soybean oil.

AMIS also released its latest Market Monitor last week, also citing falling commodity prices due to abundant global supplies, combined with an appreciating US dollar and falling oil prices. Wheat production predictions rose by 2.3 million tons, based largely on harvests in Canada and Russia. Global wheat ending stocks were also raised by 3.8 million tons and are expected to reach their highest levels in 13 years.

Maize production forecasts increased by 2.6 million tons, based on larger than expected production in China and Canada. Imports to Vietnam and South Africa are expected to be higher than originally anticipated, and global ending stocks are expected to be somewhat lower.

Both rice production and rice ending stocks are also predicted higher, and global trade in rice may approach the record level seen in 2014. Soybean production was cut this month by 2 million tons based on lower estimates for the US and bad weather in Brazil. Ending stocks will be lower than originally anticipated based on lower forecasts for Argentina, the US, and India, but will still exceed the record set in 2014.

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