The Commonwealth Bank Agri Index recorded negative growth during the past month, delivering a loss of 15.0 per cent over the month, while the S&P/ASX200 index reported a loss of 4.6pc over the same period.

But Commonwealth Bank Agribusiness executive general manager, Brendan White, said the Agri Index's move into negative territory was in line with volatility the market had been expecting.

"In times of economic downturn, investors will always remain cautious and this month's results are indicative of their prudent approach," Mr White said.

"In addition, two of the largest companies that make up the Agri Index had their earnings downgraded, significantly impacting the performance of the sector."

ABB Grain Limited (ABB) and Nufarm Limited (NUF) had their earnings downgraded during the past month.

Currently, ABB accounts for 15.3pc of the Agri Index, with NUF accounting for 18.8pc.

Another factor contributing to the agribusiness index overall performance this month was the decline in Incitec Pivot Limited's share price, which fell by 21pc.

"The Agri Index is heavily dependent on the performance of these companies and as such the current results are not surprising," he said.

However, the CBA says this month's short-term loss is buoyed by a more favourable long-term forecast for the agribusiness sector.

"The consensus forecast return for the year to July 2010 is 9.9pc," Mr White said.

"This is an increase in the forecast from last month and represents improvement across the board of forecast returns for key companies in the sector."