Good weather has made for a perfect storm for agribusinesses, with the prices of most farm commodities nosediving.
Five out of the six main agriculture commodities have plunged deep into negative territory, with some investors questioning if they have been oversold.
But the answer is simpler. Bumper harvest around the world for wheat, corn, soybeans, sugar and cotton have led to supply overtaking demand and therefore price falls.
Global wheat prices have fallen 28 per cent since May, after when Russian-Ukraine tensions ignited in February It was feared the conflict could hinder supply, with poor weather in the US also limiting production.
But so far Black Sea exports have been unaffected and the US weather has flipped creating perfect crop conditions.
"The USDA's latest estimates this month revised up their global forecasts for wheat in 2014/15 to a record amount," NAB agriculture economist Phin Ziebell said.
"There were also some worries about the French and German harvest because of harvest rains and downgrading the crop to stockfeed. But overall, the supply is looking plentiful so you have seen price falls."
The better US weather has also eroded the prices of corn and soybeans, which have fallen 15.1 and 14.3 per cent since the start of the year.
Mr Ziebell said a better-than-expected harvest in top sugar producer, Brazil, has winded that commodity, which has dived about 16 per cent in the past two months.
This is despite drought concerns in South America's biggest country sending coffee prices soaring more than 66 per cent since the start of this year.
"There have been some residual concerns about the Brazilian crop being hit by drought, which has meant that they have been able to get a lot of their early crop out pretty quickly," Mr Ziebell said.
"That has seen some promising early yields but whether the rest of it, which is drought affected, disappoints a bit, we'll find out soon enough."
Mr Ziebell said the China scrapping its stockpiling program had hit cotton prices, which have fallen 22.3 per cent this year.
Beijing has swapped the stockpiling policy it launched in 2011 for a crop subsidy program this year, but it has not publicly disclosed all the details. The move has raised concerns over how and when fresh domestic supplies will be available to the country's mills.
"They changed their policy when it comes to stockpiling and there could be changes to payment arrangements and subsidies. There is still quite a bit of uncertainty about what that will mean for the industry," Mr Ziebell said.
Upgraded crop forecasts in the US, the world's biggest exporter of cotton bales, have also depressed prices.
