NAB Rural Commodities Wrap April 2018
The NAB Rural Commodities Index gained 3.0% month on month in March, its second consecutive rise.
- The US-China trade dispute, which began with the US imposition of steel and aluminium tariffs, has now widened considerably. While the confrontation has not yet reached an all-out trade war yet, China’s retaliatory 25% tariff on over a hundred US agricultural products is an escalation. Soybeans are included in the tariffs, a major development given that China takes around two-thirds of global soybean trade. The extent to which this will affect Australian agriculture is unclear, with potential upside into some Chinese markets (e.g. horticulture, wine and potentially feed grains) but with a dose of uncertainty, particularly for global grain markets.
- Back home, winter planting is rapidly approaching and conditions are hotter and drier than average across most grain-growing regions. While there is still plenty of time for rains to provide good yields, in-season events will be key, with little subsoil moisture going into planting.
- Overall, Australian agricultural prices strengthened in March, with the NAB Rural Commodities Index up 3.0%.
For further details, please see the attached report: