Rural Commodities Wrap – October 2015


Key points

  • Agricultural prices continued to diverge in September. Most major grains fell (wheat was down almost 10% in AUD terms), as did fruit, vegetables and trade lamb (reflecting seasonal trends). However, dairy prices strongly rebounded on supply concerns. Sugar, beef and rice were also higher in AUD terms. Overall, the NAB Rural Commodities Index was off 1.5% (AUD) and 4.1% (USD).
  • After dropping below 70 US cents in mid-September, the AUD since rallied and is now above 72 US cents. Overall, we see the AUD as a 65 to 75 US cent currency (on the wide) through 2016 and forecast the AUD to bottom out at 68 US cents in Q1 2016.
  • Signs that the effects of El Niño are ramping up are reflected in a very hot and dry three month rainfall outlook for south-eastern Australia. However, the Bureau of Meteorology forecasts that Western Australia may enjoy decent rain and conditions are expected to be neutral in much of Queensland. This outlook is likely to put further pressure on graziers in Victoria and New South Wales coming into summer.

For further analysis, download our full report.

About the Author: Phin Ziebell

Phin Ziebell: Senior Analyst, Economics
Phin Ziebell

Phin is NAB's Agribusiness Economist. He is responsible for analysing and reporting on the trends and developments in the agribusiness industry and works closely in conjunction with bankers in NAB’s Agribusiness division. Phin graduated with bachelor degrees in Commerce and Arts from the University of Melbourne and joined NAB in mid-2014. He was previously an economist at the Victorian Department of Primary Industries and Victorian Treasury.

> Read Phin Ziebell's profile

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