'Summer of content' still on offer for grains & oilseeds
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‘Summer of content’ still on offer for Australian grains and oilseeds – Rabobank Agri Monthly

A ‘summer of content’ is still on offer for Australia’s grains and oilseeds sector this year, despite a recent softening in prices for global agri commodities and for some local commodities, Rabobank says in its just-released monthly outlook.

In its July Australian Agribusiness Monthly, the agribusiness banking specialist says the S&P GSCI Agriculture Index – a key benchmark of global agricultural commodity market performance – lost more than 15 per cent during June, including a 20 per cent month-on-month price decline in Chicago Board of Trade (CBOT) wheat. And further substantial declines have been recorded into early July.

The drop in global agri commodity prices came as other asset classes also fell – triggered by interest rate hikes, inflation concerns and “hawkish central bank rhetoric”.

For grains and oilseeds, the report said, the decline in prices was driven by significant selling by institutional funds, as well as this year’s northern hemisphere harvest beginning to hit the market. Hopes had also lifted for the potential resumption of Ukrainian grain exports to the world market, with discussions around the opening of a trade corridor.

Meanwhile, there was also some easing in local prices seen across June for grains and oilseeds, cotton, sugar and also the Eastern Young Cattle Indicator (EYCI).

However, despite local grains and oilseeds prices following global prices some of the way down over the past month, the global outlook continues to support a “summer of content” for local prices this year, the report says.

RaboResearch general manager for Australia and New Zealand Stefan Vogel says Rabobank continues to expect above-average global prices to remain for grains and oilseeds, although has marginally downgraded its forecast for CBOT wheat to between USc1050 a bushel to USc1080 a bushel over the next 12 months.

“The resumption of Ukrainian exports is far from certain and northern hemisphere weather risks are high, with heat wave and La Nina impacts in the US and Europe persisting,” he said.

Locally, while many Australian farmers are still battling to get crop planted due to wet conditions, especially in New South Wales and Queensland, several drier weeks in June had allowed an uptick in planting progress, the report said. Central NSW has been impacted most severely in recent weeks by downpours.

Rabobank’s forecast for local wheat prices remains unchanged from our late May crop outlook – quarterly average Newcastle APW1 track prices of a $428 a tonne to $406 a tonne by quarter four 2022.

For dairy, the report says, the new production season has begun with record milk prices across all states, providing a platform for profitability despite cost headwinds.

For beef, after a temporary jump in prices following rain in May, young cattle prices had returned to their downward trend from earlier in the year. The bank expects this to continue through to spring when producer-buying activity may lift prices.

Good supply saw lamb prices remain stable this June, unlike the rises seen at the same time last year. Although lamb supplies are expected to decline in coming months, which would support upward price movement, these increases are not expected to be large.

A “dramatic” 25 per cent month-on-month fall in the global cotton price seen in June is not expected to be the end of price declines for the year, the report says, with consumer confidence in key markets signalling slower demand ahead. Local prices of below AUD600 a bale for cotton are now expected for quarter four this year.

For wool, while the 2022 price outlook is supported by post-Covid consumer spending around the world, 2023 is looking “increasingly gloomy” for prices, with consumer confidence – the “canary in the coal mine for demand” – declining substantially in many parts of the world.

For farm inputs, Mr Vogel said, global fertiliser prices edged higher in June, but were still lower than the highs seen in the first half of 2022 – by 36 per cent for urea and 4 per cent for MOP (potash).

“Local prices are expected to face continued volatility over the next half year, but we see chances for softening N, P and K (nitrogen, phosphorus and potassium fertliser) prices later this year and in early 2023,” he said.

High oil costs are set to continue though, with the bank seeing more “price upside” through 2022 as tightness in global supply is expected to outweigh recessionary impacts on demand.

Global ocean container rates have passed the peak seen in 2021 and are expected to find a ‘new normal’ over the next 12 months.


Rabobank Australia & New Zealand Group is a part of the international Rabobank Group, the world’s leading specialist in food and agribusiness banking. Rabobank has more than 120 years’ experience providing customised banking and finance solutions to businesses involved in all aspects of food and agribusiness. Rabobank is structured as a cooperative and operates in 38 countries, servicing the needs of approximately 8.4 million clients worldwide through a network of more than 1000 offices and branches. Rabobank Australia & New Zealand Group is one of Australasia’s leading agricultural lenders and a significant provider of business and corporate banking and financial services to the region’s food and agribusiness sector. The bank has 90 branches throughout Australia and New Zealand.

Media contacts:

Denise Shaw
Head of Media Relations
Rabobank Australia & New Zealand
Phone: 02 8115 2744 or 0439 603 525
Email: denise.shaw@rabobank.com

Will Banks
Media Relations Manager
Rabobank Australia
Phone: 0418 216 103
Email: will.banks@rabobank.com