Agricultural commodities to wilt

RABOBANK has declared October’s rain too little, too late for some commodities, and believes ongoing hot, dry conditions are more than likely to wilt others.

The Australian dairy forecast, cropping outlook, and the supply of young cattle and lambs are sagging in the face of a drier-than-average threemonth forecast, with the wool market also unable to find a floor in the current market correction, as buying remains restrained.

Rabobank’s monthly report says that while mid-spring rainfall might have filled up gauges across drought-ravaged swathes of NSW and Queensland, it has not improved summer harvest prospects, with this year’s grain volumes expected to drop 23 per cent from last year to 29 million tonnes.

“As the harvest gets going, or doesn’t, as is the case in many regions, all eyes are on just how low production will be in the most dry areas of Qld, NSW, Vic and also SA,” Rabobank said in its report yesterday. “Very low new crop supply will keep Australian grain prices in their elevated range well into 2019 … (as well as) the prospect of lower livestock feed grain demand and higher winter grain crop production.”

October saw areas surrounding Dubbo, Moree, Dalby and Emerald exceed rainfall totals for the previous six months combined, but warming Pacific waters have increased the likelihood of an El Nino and hot, dry weather into the new year.