Australia Agribusiness Monthly May 2016

This monthly update provides a market outlook for grains & oilseeds, dairy and other key commodities, and gives an overview of what developments to watch in the weeks to come.

photo of Australian plains

Summary

  • Grains & Oilseeds:  The next month may see continued speculative short covering, and subsequent volatility in grain prices. Fundamentally, however, we expect old crop wheat prices to remain range bound, as heavy global stocks are further bolstered by a large northern hemisphere crop in 2016/17.
  • Dairy:  Producers are bracing for a continued low price environment, but the spread in the opening milk price could be wider than normal.
  • Beef:  Prices are expected to remain relatively stable for the coming months. Buying is not expected to increase until spring, cattle are in short supply and export markets are relatively stable.
  • Sheepmeat:  With the normal seasonal contraction in slaughter there are again indications that all prices will remain firm and edge towards the AUD6.00/kg mark over the coming months.
  • Sugar: Volatility in the sugar market is back with a vengeance, with the ICE#11 increasing from USc14.01/lb in mid April to a high of USc16.98/lb in May. Looking ahead, eyes are turning to the progress of the Brazilian harvest.
  • Tim Hunt

    Head of RaboResearch Food & Agribusiness - Australia & New Zealand
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