Australia Agribusiness November 2021: Reaping Good Rewards

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

Commodities:  Despite strengthening of the AUD this past month, and the approach of Australia’s second consecutive bumper winter crop harvest, our rural commodity price index rose again in October.

Grains & Oilseeds:  Local G&O prices are expected to be resilient for the rest of 2021, with possible upside in Q1 2022.

Dairy: A weakening global supply outlook will bring price support for commodities in the near-term.

Beef: Positive seasonal conditions support young cattle prices, but export markets indicate headwinds for finished cattle prices.

• Sheepmeat:  With a drop in lamb slaughter in October and strong global prices, lamb prices are expected to remain strong.

Cotton:  A price step down is expected, but ICE # 2 cotton is likely to remain above USc 85/lb over the year ahead.

• Wool: The wool price outlook is still positive, but any upside is burdened by lockdown legacies.

Downstream Markets: Consumer response to food inflation will be a local and global watching brief in months ahead.

• Farm Inputs:  Fertiliser prices are expected to remain at least at current levels in the run-up to sowing next year’s winter crop in April. Of even bigger concern is supply, with challenges growing in the last month.

• FX: Despite strength this past month, we still see the AUD/USD edging lower on a one to three-month view, before recovering to USc 74 on a 12-month view.

• Oil: While we expect Brent Crude is nearing a short term peak, the fundamentals of the global market remain strong.  We expect Brent crude will trade around 81USD/bbl into the second half of 2022.

  • Cheryl Kalisch Gordon

    Senior Commodities Analyst; Head of RaboResearch Food & Agribusiness – Australia & New Zealand, a.i.
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  • Angus Gidley-Baird

    Senior Analyst – Animal Protein
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  • Michael Harvey

    Senior Analyst – Dairy & Consumer Foods
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  • Wesley Lefroy

    Senior Analyst – Agriculture
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  • Emma Higgins

    Senior Analyst – Agriculture
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  • Genevieve Steven

    Analyst – Agriculture
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  • Dennis Voznesenski

    Analyst – Agriculture
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