Australian growers are expecting a solid 2014-15 Australian oilseed crop, according to the latest National Australia Bank (NAB) Agribusiness Rural Commodities Wrap.
General Manager of NAB Agribusiness, Khan Horne said reports from NAB Agribusiness bankers in key canola growing areas show substantial regional variation.
This news comes as downward movement of the AUD is providing good news for growers and it is forecast to continue on this trend.
Australian Bureau of Agricultural and Resource Economics and Sciences (ABARES) forecasts total canola production to reach 3.4 million tonnes, factoring in moderate falls in Western Australia, Victoria and South Australia, and steady production in New South Wales. Global oilseed supply is forecast to hit a record 528 million tonnes in 2014-15.
“We expect oilseed prices to weaken over the coming year, reflecting the above average forecast production in most growing regions around the world,” Mr Horne said.
The AUD has now fallen below 90 US cents, driven by a rise in volatility on global markets, an unwinding of long positions and declining metals prices.
“NAB maintains its forecast that the AUD will fall to 88 US cents in the fourth quarter this year and 85 US cents by mid-2015. The cash rate is not expected to change until the end of 2015,” he said.
The NAB Rural Commodities Index fell for the fourth straight month in August, down 3 per cent for the month, and 4.4 per cent in USD terms. The falls were led by lower lamb, dairy, cotton wheat and sugar prices. The index is now 5.6 per cent lower than August 2013 in AUD terms.
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About NAB Agribusiness
National Australia Bank (NAB) Agribusiness is Australia’s leading Agribusiness Bank and has been supporting Australian farmers for more than 150 years. NAB employs more than 600 agribusiness banking specialists in 110 metropolitan and regional locations Australia-wide. With their local and industry knowledge, our Agribusiness team understand the unique financial and environmental needs of farmers and businesses beyond the farm gate – whether they provide inputs into agriculture or process, distribute or market primary produce. NAB also has a specialist Agribusiness Asia Desk to help Australian farmers make the most of the rapid growth in demand for high quality produce in Asia. We deliver a flexible range of agribusiness products and services by listening to and working with our customers, to tailor the best packages and advice for their businesses. For further information please visit www.nab.com.au/agribusiness.
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