Australia Agribusiness July 2021: Local Strength Savouring Global Support

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

- In commodities, despite a broadly softer global agri commodity complex, local prices gained, taking our Rabobank Rural Commodity Index to a 15-month high.
 
- Strong global fundamentals to keep local grains and oilseeds prices firm in 2H 2021.
 
- Record milk pricing in the market.
 
- Beef price records continue to be broken and we see no changes to suggest they will fall.
 
- Sheepmeat prices remain strong but a seasonal dip is expected soon.
 
- In cotton, tightened US and Brazilian export availability lifts our forecast for ICE NY #2 to USc 88/lb in Q3. This should support Australian prices in the face of new crop selling in Q3.
 
- Increased consumer spending and vaccination roll-out to strengthen wool prices.
 
- Covid-19 prompted government restrictions on dining and foodservice channels continue to buoy local retail sales. Australian food retail sales were 1.4% higher in May than they were in April.
 
- Global fertiliser markets found yet another gear in June, with most prices across the nutrient complex increasing between 5% and 20%. Locally, high prices are here to stay for the remainder of winter and spring, with further upside possible if local supply tightens.
 
- After a June shakeout to 74, we expect the AUD to recover to the USc 78 range over the three-month outlook and strengthen towards USc 79 on a 12-month view. 
 
- Brent crude prices have continued to increase through June, supported by ongoing investment in commodity markets. We maintain our bullish view moving forward – we expect Crude Oil to reach the low 70 USD’s /bbl  by 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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