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.
• 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.
Where to go from here
Cheryl Kalisch GordonSenior Commodities Analyst; Head of RaboResearch Food & Agribusiness – Australia & New Zealand, a.i. Read more
Angus Gidley-BairdSenior Analyst – Animal Protein Read more
Michael HarveySenior Analyst – Dairy & Consumer Foods Read more
Wesley LefroySenior Analyst – Agriculture Read more
Emma HigginsSenior Analyst – Agriculture Read more
Genevieve StevenAnalyst – Agriculture Read more
Dennis VoznesenskiAnalyst – Agriculture