Commodity prices tracking to perform well in 2018

Rural Exchange 22/07/2018

Rabobank has released its July agri-business outlook and the agricultural sector is looking mostly positive.

Beef prices have continued to track upwards and lamb prices are looking sustainable.

A big question is whether global dynamics will support wool prices this season.

Rabobank analyst Blake Holgate joined Rural Exchange to break down their findings.

Commodity Outlook

  • Dairy: Trade wars and the upcoming spring peak in New Zealand clouds short-term market sentiment.
  • Beef: While the lower NZD/USD, and seasonal decline in cattle supplies will put some upward pressure on prices, Rabobank expects any price increases over the next month to be limited by softening US imported beef prices.
  • Sheepmeat: Rabobank expects competition for the remaining lamb supply to continue to put some upward pressure on prices, although further upside will be limited by the processors' ability to extract further value from the market.
  • Wool: Increased exports, in combination with forecast steady production at low levels, should help to support improvement next season.
  • Wine: Chinese wine imports continue to grow, with NZ price per litre foremost.
  • Horticulture: Potential for futher competition in the NZ avocado export market comes from Peru.
  • Fertiliser: Local prices remain stable this month, against a backdrop of rising global benchmarks and lifting freight rates.
  • FX: Rabobank maintains a forecast of the NZD of USc 65 by June 2019.
  • Oil: The Crude Oil Price forecast takes another leap, while an upward trend is forecast for the BDI.

Watch the full interview with Blake Holgate above.

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