Spring rains lift prices to beef up con­fi­dence

Tasmanian Country - - THE STOCK REPORT -

RIS­ING beef cat­tle prices on the back of good rains in Queens­land and NSW have led to a lift in a ru­ral com­modi­ties in­dex.

Na­tional Aus­tralia Bank’s ru­ral com­modi­ties in­dex recorded a lift of 2.1 per cent in Oc­to­ber.

The in­dex, which tracks 28 ru­ral com­modi­ties weighted by their rel­a­tive size in the agri­cul­tural sec­tor, is sit­ting on 128.6 after the first rise in five months, but still well down on the level of 139.5 recorded at the same time last year.

The ma­jor fac­tor af­fect­ing the in­dex over the past month was a rise in beef prices of 4 per cent, the first monthly in­crease for the in­dus­try since April this year.

NAB said lamb, fruit and veg­eta­bles also per­formed well, with prices ris­ing 1.4 per cent, 6.3 per cent and 5.7 per cent re­spec­tively.

Wool also per­formed well in Oc­to­ber, with prices gen­er­ally ris­ing 1.5 per cent over the month.

But grain prices re­mained “mori­bund”, driven by favourable grow­ing con­di­tions around the world.

Weather has an im­por­tant in­flu­ence on the com­mod­ity in­dex as well as the ex­change rate. The bank is fore­cast­ing the Aus­tralian dol­lar to fall to 75 US cents by year end and trade at US73c for much of next year.

NAB agribusi­ness econ­o­mist and re­port au­thor Phin Ziebell said dry weather in re­cent months saw cat­tle prices slide but re­cent rain had brought a dra­matic turn­around.

“Still, we ex­pect risks to cat­tle to con­tinue to be on the down­side after an ex­traor­di­nar­ily good run,” Mr Ziebell said

He said the Eastern Young Cat­tle In­di­ca­tor was now sit­ting on 575 cents a kilo­gram and ris­ing, after reach­ing al­most 500c/kg in Septem­ber.

Cat­tle Coun­cil of Aus­tralia pres­i­dent Howard Smith said the re­cent rains had given cat­tle pro­duc­ers a chance to re­tain their stock and re­build their herds.

“While some re­gions are still dry, it’s been a ben­e­fi­cial rain,” Mr Smith said.

“A lot of peo­ple are re­build­ing their herds and if the sea­son goes our way, then that will keep prices firmer.

“And the cur­rency has come back a bit in re­cent times, so that has also helped.”

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