Key points:

• The NAB Rural Commodities Index, which covers 28 agricultural commodities, gained 2.1% (AUD) and 0.5% (USD) in February on the back of higher fruit, dairy, fibre and pulses prices, which offset mixed performance across grains and protein.
• We have made minor adjustments to our 2014-15 price forecasts this month. Wheat prices have been revised down on ongoing ample supply, while beef, lamb and dairy have been moderately revised upwards. We continue to expect a falling AUD to provide a partial offset to falling international grain prices.
• Rainfall was below average in many parts of Australia in February, although the Bureau of Meteorology’s latest medium term forecast shows a return to more neutral conditions in the coming three months, with average rainfall forecast across much of the east coast and above average rainfall forecast in South Australia and Western Australia. If the forecast rainfall eventuates, many areas could enjoy a decent autumn break.

For further analysis, download our full reports.

• Rural Commodities Wrap – March 2015