Australia Agribusiness August 2021: Global Weather Pain, Australia’s Gain?

Here are the main highlights for some of Australia’s key commodities. The full report provides an overview of the developments to watch in the upcoming weeks.

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Report summary

- New records for the Eastern Young Cattle Indicator and canola, as well as ongoing strong lamb prices, kept the Rabobank Rural Commodity Index steady in July and near to record highs.

- The disappearing Canadian canola crop supports our expectations. AU non-GM canola will trade between AUD 680 and AUD 720/tonne to track even with the positive outlook for AU tonnes this year.

- Dairy commodity markets are likely to continue to trend lower in the coming months.

- If producer buying activity eases over the coming months cattle prices are expected to also ease from record highs.

- Stronger US import prices are driving lamb prices.

- Our expectation that the AUD will soften towards USc 72 in Q4 supports our forecast for local cotton prices to be above AUD 600/bale for the balance of this year.

- For wool, positive moves in the winter recess bode well when auctions resume.

- Further lockdowns across metropolitan Australia will lead to channel distortion again.

- In farm inputs, we don’t expect any major relief on the price and supply fronts ahead of next season, making now a good time to commence discussions with input suppliers ahead of the new year.

- We have adjusted down our AUD forecast and now see the currency edging towards USc 72 by year-end and maintaining a sub-USc 75 value over the first half of 2022.

- High prices and congestion are expected to continue in the global ocean freight market until at least year-end.
  • Cheryl Kalisch Gordon

    Senior Analyst – Grains & Oilseeds; Head of RaboResearch Food & Agribusiness – Australia & New Zealand, a.i.
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  • Dennis Voznesenski

    Analyst - Grains & Oilseeds, Animal Protein
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  • Angus Gidley-Baird

    Senior Analyst - Animal Protein
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  • Emma Higgins

    Senior Analyst - Dairy
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  • Michael Harvey

    Senior Analyst - Dairy
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  • Wesley Lefroy

    Analyst - Agriculture
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  • Genevieve Steven

    Analyst – Agriculture
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