Key Points:

• April saw a renewed rise in beef and lamb prices, combined with stability across major grains, balanced against lower dairy, fruit and vegetable prices. Overall, the NAB Rural Commodities Index was essentially flat – down 0.2% in AUD terms for the month. Conversely, an unexpectedly higher AUD saw the USD index increase 2.1% over the period. This result runs counter to the overall trend since 2014, which otherwise saw AUD prices generally outperform USD prices as the AUD depreciated.
• The Bureau of Meteorology has now upgraded its ENSO tracker to El Niño status, noting that the tropical Pacific Ocean is now in the early stages of an El Niño event. This news bodes ill for winter and spring rainfall in northern and eastern Australia, although impacts of El Niño events are disparate and difficult to forecast.
• Drought assistance featured prominently in the 2015-16 federal budget, with additional funding to extend concessional loans for another year and further funding for management of pests, local council funding and expanded access to social and mental health services in drought affected areas.

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• Rural Commodities Wrap – May 2015