National Australia Bank (NAB), Media Release, 25 March 2024

Rising prices for a range of rural commodities including cattle, cotton and dairy have seen the NAB Rural Commodities Index* increase for the fourth month in a row.

NAB’s March Rural Commodities Wrap released today reports the Index increased 2.2 per cent month-on-month in February and is back up around levels last seen in April 2023.

NAB Group Economics Associate Director Lea Jurkovic said cattle prices were again the main driver of the monthly increase and are now around 80 per cent higher than their October 2023 lows.

“Prices were supported by improved producer sentiment and strong export demand but slipped towards the end of the month as saleyard supply increased,” Ms Jurkovic said.

“Export volumes were high again in February on the back of strong demand from the United States and Japan.”

The Index shows prices for rice, cotton, pork, dairy and fruit and vegetables also recorded increases in the month.

Cotton prices bounced up 10 per cent month-on-month in February in monthly average terms and are expected to rise in the second half of the year as global demand recovers and outpaces global supply, despite improvements in seasonal conditions.

Sugar prices increased around 5 per cent month-on-month in February to be around $789/tonne on average but remain well below their October 2023 highs. Dry conditions in Brazil and Thailand continue to constrain global supply.

“Winter crops continued their downward trend on the back of high global supply and subdued demand,” Ms Jurkovic said.

“Wheat prices continue to trend downwards and in February were around levels last seen in August 2021. A continuation of high global supply, particularly with recent strong exports from Russia, is weighing on prices.

“Prices for feed and malting barley were both relatively flat in February in monthly average terms, and barley exports to China softened due to Lunar New Year celebrations. Canola prices were also relatively unchanged in the month.”

Feed grain prices slipped about 5 per cent over the month in February in monthly average terms. The decline was driven by falls in the price of barley and feed wheat, while prices for oats and sorghum remained relatively unchanged.

The RBA left the cash rate unchanged at 4.35 per cent as expected in March. NAB continues to pencil in the RBA’s first rate cut for November 2024, with a gradual cutting cycle to reach 3.1 per cent by end 2025.