National Australia Bank (NAB), Media Release, 20 December 2023
For the first time in thirteen months, the NAB Rural Commodities Index* saw an increase in November, with cattle prices being the single greatest driver.
NAB’s December Rural Commodities Wrap released today [20 December 2023] reports the Index increased 3.5 per cent month-on-month in November, retracing its October fall to be slightly above its September level.
NAB Group Economics, Associate Director, Lea Jurkovic, said cattle prices rose 20 per cent in November on the back of above-average rainfall which improved producer sentiment, and an increase in demand going into the holiday season.
“Prices for other meat products also increased, while winter crops saw a decline across the month,” Ms Jurkovic said.
“The upwards trend in wheat prices broke in November which saw prices slip back to around July levels at $385/t, on average.
“Barley prices also continued to ease for the third month in a row, and canola continued its downwards trend, hitting a low of $625/t in the second-last week of November.”
In good news for farmers, seasonal conditions improved slightly across November, with rainfall levels nearly 40 per cent above the long-term average.
Ms Jurkovic said this has improved soil moisture and sowing conditions for summer crops in Queensland and northern New South Wales.
“But despite the relief, dry conditions are expected to continue for the next few months,” she said.
“Summer rainfall is likely to be below the historical median for Western Australia, northern and central Northern Territory, northern Queensland, and coastal New South Wales.
“The Bureau of Meteorology (BoM) models indicate that El Nino is ongoing, however the positive Indian Ocean Dipole event – which increases the dryness associated with El Nino – has likely already peaked and is showing signs of easing in early December.”
Dairy, cotton, and sugar prices trended lower in November, while trade lamb and wool remained largely stagnant.
“Trade lamb prices remained on average around 475c/kg, well below the levels of early 2023,” Ms Jurkovic said.
“Australian wool prices continue to see fairly limited movement, though prices picked up in the back half of November with increased demand from China, and a greater presence from Italy and India at wool auctions.”
NAB forecasts the Australian Dollar (AUD) will strengthen, to reach 66 US cents by the end of 2023 and trend higher across 2024.
* The NAB Rural Commodities Index is based on the price and production data for 28 commodities and is weighted by their relative size in Australia’s agricultural sector.
