The NAB Rural Commodities Index in January increased for the third month in a row. The index increased 2.2% month-on-month, and is back around levels seen in May 2023.
The NAB Rural Commodities Index increased in November after declining for each of the past thirteen months. The index increased 3.5% month on month, retracing its October fall to be slightly above its September level.
Cattle prices were the main driver of the increase in the month, reversing their October decline. Prices rose 20% on the back of above-average rainfall, which increased producer sentiment, and an increase in demand going into the holiday season. Prices also increased for other meat products. In contrast, prices for winter crops fell.
Seasonal conditions improved slightly in November, which saw rainfall levels nearly 40% above the long-term average. This improved soil moisture and sowing conditions for summer crops in Queensland and northern New South Wales, though lower layer soil moisture is still below average in large areas and more rainfall is required for next year’s winter crops.
Despite the relief, dry conditions are expected to continue for the next few months. Summer rainfall is likely to be below the historical median for Western Australia, northern and central Northern Territory, northern Queensland and coastal New South Wales.
The BoM models indicate that El Nino is ongoing, and they continue to forecast warmer days and nights across the country. However, the positive Indian Ocean Dipole event, which increases the dryness associated with El Nino, has likely already peaked and showed signs of easing in early December.
© National Australia Bank Limited. ABN 12 004 044 937 AFSL and Australian Credit Licence 230686.