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 continued to fall in September –the eleventh month in a row it has declined –down by 4.6% mom. The index is now 34% below the peak in rural prices back in June 2022.
Once again, cattle was the key driver of the decline in the index –with cattle prices plunging by 21% mom in September and falling further in early October to the lowest levels since late 2014. Various reports suggest that low confidence due to current and upcoming seasonal conditions may have encouraged producers to sell off stock –driving prices lower.
In contrast, sugar, barley and fruit prices were all stronger in September.
Seasonal conditions have been challenging –last month was the driest September on record (with rainfall almost 71% below average) and the third hottest. The BoM’s outlook for both October and November look extremely dry in most regions of the country.
For the period for November through January, the BoM’s outlook sees below median rainfall across much of western, northern and southern Australia, with small areas in NSW and Queensland with a chance for above median rainfall.
As widely expected, the BoM formally declared an El Nino event in mid-September. El Nino is associated with hotter and drier conditions across eastern and northern Australia –which is likely to negative impact a range of key agricultural regions.
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