World Farming Agriculture Commodity news - Weekly Updated - Exclusive and very popular -
Here are the main highlights for some of New Zealand’s key commodities and economic influences for this month. The full report provides an overview of the developments to watch in the upcoming weeks.
Beef: With farmgate pricing tracking 10% above five-year averages, the New Zealand winter months are looking favourable for more of the same with US summer grilling season kicking off.
Sheepmeat: High lamb slaughter numbers have been seen over the last weeks of autumn with the suggestion that procurement pressures will bump prices up a notch and the season low has passed.
Farm inputs: Farm input markets remain quiet as demand is soft and supply outputs are steady. On the other hand, high freight prices are negatively impacting further farmgate price reduction.
Interest rates and FX: A sharp rise in unemployment in Q1 gives hope that the RBNZ’s dose of economic cod liver oil is working. This month will be a key point of interest. but persistent non-tradeable inflation remains a problem.
Oil and freight: Brent crude oil rose again in April to mark the fourth-straight month of gains, but has since fallen substantially to USD 83/bbl. Slower-than-expected growth in the US and de-escalation in the Middle East pressure prices.
Here are the main highlights for some of Australia’s key commodities and economic influences for this month. The full report provides an overview of the developments to watch in the upcoming weeks.
Wheat and barley: May is the key month for determining yields in Europe and the Black Sea’s winter wheat varieties. Market volatility is expected as prices will swing according to what the rainfall radar indicates. Australian prices may follow a different trend if the late May rainfall does not come.
Canola: The vegetable oil market is chasing price balance amid an imbalance of oilseed meal and oil demand. This stretches crushers’ margins and might cause a larger carryover than initially expected.
Dairy: Milk production in Australia continues to show signs of sustained recovery. So far this season, through the end of March, milk supply has increased by 3.1%, with growth across all regions. This trend should continue into 2024/25, albeit at a modest rate.
Beef: Prices continue to track sideways. Although a forecast of drier conditions in May could see prices ease a little, we believe seasonal forecasts into June and July should continue to support prices at current levels.
Sheepmeat: Lamb prices are starting to split. Slaughter-weight lambs are holding steady while restocker and merino lamb prices have started to drift down again. This could be a positive sign that consumer demand is returning to support slaughter-weight lamb prices.
Cotton: ICE #2 Cotton futures collapsed to 18-month lows as funds quickly exited their massive net long position over the course of April in anticipation of a strong global 2024/25 supply outlook and sluggish demand.
Wool: Wool prices continue to hold at existing levels amid indications that clothing demand may be on the rise, leading to a lift in industry sentiment.
Consumer foods: The latest retail trade data for March highlighted an ongoing slowdown in Australian household expenditure on food. Quarterly food price inflation moderated in March and should continue this trend in the coming months.
Farm inputs: Rabobank has revised its forecast on the RBA cash rate to include two more 25 basis point rate hikes this year, in August and November. We believe that the RBA is at risk of deviating materially from its projected path for inflation and unemployment, making it harder to justify Australia’s comparatively low cash rate.
Energy and freight: Brent crude oil rose again in April to mark the fourth-straight month of gains, but has since fallen substantially to USD 83/bbl. Slower-than-expected growth in the US and de-escalation in the Middle East pressure prices.
Highly pathogenic avian influenza (HPAI) has been detected in dairy cows in nine US states. The virus was also identified in milk and dairy products, though the FDA says that pasteurized milk remains safe. We outline what you need to know about HPAI in the US dairy sector, including the measures the USDA is taking to prevent spread, and the implications for dairy operations, markets, and human health.
The median price per hectare for farmland in Australia increased by 11% year-on-year in 2023. Arable land values are booming, up 20%, while grazing areas plateaued, slipping 0.3%. Total sales of all farmland types approached 3 million hectares in 2023. We analysed the year’s sales activity to develop a picture of the latest farmland values across all regions in Australia.
Demand for farmland is changing behaviour. Buyers are more focused on finding the right land value for their money and spending more time on due diligence process. Rabobank’s Q1 2024 survey shows that farmers’ purchase intentions decreased to 6% YOY, compared to 7% last year. The income outlook for 2024/25 is positive, with prices still slightly above the historical average for agricultural commodities. The weather forecast is a point of attention, as some regions are coming from a deficit in late 2023.
The outlook for land prices in 2024 forecasts further growth, though rather small year-on-year. Following better cattle prices and an improved market outlook, grazing areas should partially recover their growth pace. The long-term view for land prices for 2024 to 2029 indicates a slow and gradual reduction in the growth rate, as buyers are looking for the best value for money.
World Farming Agriculture and Commodity news - Short update - 3rd Week APRIL 2024
