NAB Rural Commodities Wrap: September 2018

The NAB Rural Commodities Index was up 0.7% in August, with grain, lamb and wool prices on the rise, but cattle and dairy lower. Continued drought conditions in the east is likely to see elevated grain prices but lower cattle prices.

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Key Points

  • Agricultural prices and production continues to be very region and commodity specific. While most of New South Wales and parts of Queensland are in severe drought, the wheatbelt of Western Australia looks on track for a good season, notwithstanding widespread late frosts. Conditions in Victoria and South Australia are varied, although a dry spring late frosts will be a challenge and cutting for hay is ramping up.
  • Livestock is mixed, with lamb receding somewhat from dizzying highs but cattle back above 500c, although this could be brief given the outlook.
  • The Bureau of Meteorology remains on El Nino watch – pointing to a 50% chance of El Nino developing in 2018. The three month outlook is generally drier than average.
  • The NAB Rural Commodities Index was up 0.7% in August, with grain, lamb and wool prices on the rise, but cattle and dairy lower. Continued drought conditions in the east is likely to see elevated grain prices but lower cattle prices.

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