NAB Rural Commodities Wrap: August 2018

The NAB Rural Commodities Index gained 1.3% month on month in July, following a 1.4% gain in June. On a year on year basis, the index was down 0.3% in July.

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Key points:

  • Drought conditions continue unabated in New South Wales and parts of Queensland, with the Bureau of Meteorology reporting that July 2018 was the driest nationally since 2002.
  • Conditions in Victoria and South Australia are better, although mostly drier than average and would be challenged by a dry spring. Meanwhile, the Western Australian wheatbelt is enjoying broadly favourable conditions and looks set for a strong season, with average to above average yields.
  • The drought has sent feed prices even higher across eastern Australia as livestock producers scramble to source adequate supplies. Grain is now moving from Western Australia to the east, a trend which may continue if – as seems likely – the eastern states see below average winter (and potentially summer) crops this season.
  • Restocker cattle prices are under considerable pressure, although there has been a shortage of finished cattle in the market. Trade lamb has performed very strongly indeed, reaching the high 700s level late last month, although it has since fallen somewhat.
  • Overall, the NAB Rural Commodities Index was up 1.3% in July, led largely by higher grain and lamb prices.


For further details, please see the attached report: