RECENT rainfall in parts of Queensland is likely to see a short-term spike in cattle prices, although autumn is forecast to be dry, and a premium on feed grain in Queensland and northern New South Wales is likely to remain for some time.
Research released earlier this week by NAB Economics, shows the NAB Rural Commodities Index gained 1.2 per cent month on month in February.
This was driven by higher grain, fruit, and dairy prices, which offset falls in beef, lamb and sugar.
NAB Agribusiness Economist Phin Ziebell said weather has been a major driver of local grain and livestock prices, which looks set to continue.
"The price bump is good news for cattle producers, and the rain will no doubt aid recently dented pasture growth in Queensland.
"But, follow-up rain is needed to see this continue,” Mr Ziebell said.
"Meanwhile, feedlots still need grain for the foreseeable future, which should keep domestic feed grain prices elevated for some time.
"Global grain prices have also surged recently, on the back of a USDA report which suggested winter wheat yields in the United States are likely to take a hit unless there is a good spring.”
Mr Ziebell said although the US situation will be key to prices, low subsoil moisture will make the 2018-19 wheat crop heavily dependent on rainfall, and the outlook for autumn at this stage is relatively dry.
"The latest ABARES forecasts suggest the sorghum harvest will be just below 1.5 million tonnes, but this is below early season expectations and arguably insufficient to meet northern feed demand.”
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