Home > Record beef prices and depreciating dollar key takeaways from Rabobank Agribusiness February report

Record beef prices and depreciating dollar key takeaways from Rabobank Agribusiness February report

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The latest Rabobank Agribusiness Monthly for February 2015 reports how January rainfall across many parts of Australia boosted beef prices to record highs in February, while the depreciating Australian dollar supported returns to Australian agricultural commodity exporters.

Prepared by Rabobank’s Food & Agribusiness Research and Advisory division, the report provides monthly commentary on Australian and New Zealand agricultural conditions.

Key highlights of Rabobank’s February edition of the Agribusiness Monthly:

Climate-wise, the rains have been bountiful in many parts of Australia; however, large parts of Queensland and Western Australia remain dry. The BOM’s outlook for much of Australia suggests temperatures will be warmer than normal to April. The end of summer and start of autumn will also be drier than normal.

There is likelihood of global wheat prices being impacted by potential production failures in spite of stocks building up to 198 million tonnes. The report takes a neutral view on global wheat prices as weather risks balance rising global stocks.

Beef prices are expected to remain steady through March with follow up rain and demand from the US to drive prices in the coming months.

The dairy segment will not see any major uplift in global prices for a few months; however, dry conditions in New Zealand have provided some support in recent months.

Sheepmeat prices are expected to remain steady through March with rainfall in early 2015 supporting better quality lambs, and continued strength in the US and Middle East markets sustaining export demand.

Subdued sugar prices will continue through the first quarter, and despite a forecast deficit, the market will be burdened by a persistent low oil price forecast and record sugar stocks.

Cotton prices will continue to battle rising record global stocks, which are estimated at 109.84 million bales, while wool will see the price improvement of early February tested, with high bale offerings forecast.

The global fertiliser markets are well balanced, although the falling AUD is putting pressure on landed prices in domestic markets.

Despite the rebound in oil prices in recent weeks, any major price recovery will be thwarted by rising global stockpiles.

The Australian dollar may see further falls reflecting weak economic fundamentals, ongoing signs of slower economic growth in China, and potential for more interest rate cuts.

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