The February figures showed agribusiness fell by more than the wider market, with the figures for the ASX 200 for the same period showing a 1.5pc drop.

Brendan White, executive general manager of agribusiness at the Commonwealth Bank, said there were a number of factors that contributed to the fall in February.

“Softer half-year results from certain companies in the Index and a weaker ASX 200 led to the downturn in the sector over the past month.”

However, he said the Commonwealth Bank saw the potential for a swift turnaround in the fortunes of ag stocks, primarily on the back of favourable seasonal conditions.

“We do expect conditions to turn for the better in the future, with recent rainfall in the eastern states of Australia likely to support the industry.”

Despite the decline in February, the Index showed the outlook for the agribusiness sector remained strong, with the sector expected to return 20.9pc over the next 12 months, a rise of 4.5pc from the December Index.

However, Mr White said the February figures showed investors needed to exercise caution regarding their investments.

“Although the long-term outlook remains optimistic, investors can’t ignore the decline in February and need to act with caution.

“The Index showed that strong returns are expected over the next year, but the forecast volatility remains high for the sector, in line with recent soft commodity price movements and farm input costs, and investors need to be conscious of this when investing in the industry.”

He said that fund investment continued to distort the market in some stocks.

“In addition, international commodity markets remain volatile and largely influenced by macroeconomic factors rather than the fundamentals for each commodity.

“We continue to see an increased influence by the investment industry affecting soft commodity prices in the traditional offshore futures markets.

“Once again, it is this flow of money that is affecting the price of our domestic produce rather than the pure fundamentals of supply and demand."