ANZ Agri commodity update

WELCOME TO THE APRIL 2020 EDITION.

Foreword - As we travel the uncharted waters of COVID-19, it’s hard enough to understand what is happening, yet alone what might happen. One thing that seems apparent is that farming is standing up particularly well. At least comparatively.

Read the whole report here.            

Wheat and Grain Insights 

Grains and oilseeds have all benefited from panic buying, boosting prices in the short-term. Overall, however, the trend in grains and oilseeds prices remains downwards.       

Beef Insights 

Of all the consumer food products which created headlines during the recent period of panic-buying in Australia, arguably the most prominent has been beef – particularly mince. For weeks, newspapers showed photos of supermarket meat refrigerators with bare shelves, though notably often with little shortage of plant-based meat products.    

Sheep Insights 

Following an impressive run through the opening months of 2020, sheep prices across the country peaked in early March. The peak and subsequent downturn across all price categories has largely been driven by plentiful supply, with high yardings presenting at sale facilities as producers looked to make the most of the record prices.    

Wool Insights 

The Australian wool market has seen some significant volatility in recent weeks – despite a brief steadying in the market in late March before plunging over 10 per cent again in early April. As one of the first industries to feel the early impacts of the virus's effects in China, the steadying of prices in late March came as China’s mills reached close to full capacity.

Dairy Insights 

Despite early fears that dairy consumption and prices would be hard hit by COVID-19 in China and globally, the impact on the sector overall has so far turned out to be limited. That said, as the virus impacts different countries at different times and to different degrees of severity, the impact on some national sectors has been quite marked from others.

Cotton Insights  

The world’s cotton prices continued their downward trend and reached a 10-year low on the back of weak demand and increasing production in the 2019/20 year – but there is some good news on the horizon as consumption is expected to outstrip production in 2020/21.     

Sugar Insights 

Australia’s sugar industry finds itself at an interesting point. Production has been falling but remains relatively strong, its major regional competitor is still recovering from drought conditions, and product demand remains strong. In contrast, low oil prices present a major challenge, pushing sugar prices to a level that is arguably below the cost of production for many growers.       

Wine Insights  

As COVID-19 grew in strength in China and other countries, one of the first Australian agri products in the spotlight for potential impacts was wine. As a discretionary product, with a major exposure to the Chinese market, Australian wine exports are particularly susceptible to fluctuations in Chinese demand.

Read the whole report here

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