Despite this overall stability, trends among individual agricultural commodities have differed considerably. Cattle prices were much stronger in August – up around 6.3% month-on-month – and global dairy prices also moved up (partially recovering from steep month-on-month falls in July). In contrast, wheat prices were considerably lower – down around 7.5% month-on-month – as the outlook for global supply has strengthened. Vegetable and canola prices were also weaker in August.

Rainfall conditions were mixed in August, with below average falls across Victoria, southern NSW and southern SA, but above average for coastal QLD and northern coastal NSW. The BoM’s latest forecasts see above average rainfall across most of the eastern half of Australia between October and December, while rainfall in the western half is likely to be within typical seasonal ranges. Warmer than average temperatures are very likely over this period.

Climatic conditions, as measured by the El Nino-Southern Oscillation (ENSO), are currently neutral, and the BoM see this trend persisting through to February next year. Of the international models tracked by the BoM, three out of six exceed the threshold for a La Niña event from October – a condition that is typically associated with above average rainfall from winter through spring (particularly in the east and north of the country).

In terms of the economic outlook, the US Federal Reserve started its rate cutting cycle this month, following other advanced economy (AE) central banks that commenced earlier in 2024. Comparatively less progress on inflation (versus other AEs) means we forecast the RBA to remain on hold until May 2025, although the recent data flow skews the risk around our call to February.

Read the full report: NAB-Rural-Commodities-Wrap-September-2024