Rural-Commodity-NAB
Rural Commodity Index strong. Image – Canva
  • NAB have released their Rural Commodities Wrap
  • Seasonal conditions and commodity prices are helping rural Australia shape up well
  • With good rainfall ahead its only set to get better

Things are looking good in rural Australia.

It is coming along to be a very good year for Australian agriculture, with both seasonal conditions and commodity prices contributing to the NAB Rural Commodities Index increasing 0.8% month-on-month in June.

This means the index is now 9.6% above the same month last year.

NAB Rural Commodities Index 
NAB-rural-wrap
Source – NAB Group Economics and Bureau of Meteorology

Seasonal conditions are looking promising. The three-month prediction from the Bureau of Meteorology forecasting a very wet spring – particularly in the eastern states.

Rainfall Outlook August – October 2021

 

NAB-BOM-rainfall
Source – NAB Group Economics and Bureau of Meteorology

The commodity prices are continuing to perform highly with cattle, in particular, performing exceptionally. The Eastern Young Cattle Indicator (EYCI) smashed the $10 mark this month – reaching record-high prices. This inflated price is likely not sustainable in the long term but may remain high until the national herd grows.

Grain prices remain elevated – reflecting the global prices. Canola is also performing well.

The recent spurt of lockdowns across the country could, however, be a threat for the rural industries. A shortage of equipment and labour is likely to develop with state border closures as well as lower food service demand, particularly in Sydney.

The Australian dollar (AUD) is performing worse than expected in recent times. The price has reached the mid-70s AUD to USD, a far reach from the mid-80s as previously predicted.

The weaker AUD is can be largely beneficial for the Australian agriculture industry, as it has the tendency to push up the value of local commodity prices.

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