GRAIN
Focus turns to weather and the Northern Hemisphere harvest
Stocks are still historically tight
AUS winter crop forecast is above average.
The Ukraine war enters its fifth month and shows no signs of stopping. The supply constraint-driven rally pushed commodity prices to record highs in mid-May with the Dec ’22 CBOT contract reaching 1250¢/bu and locally new season cash prices approached $500/t. Much of the talk was centred on the cost of food, inflation, developing energy and humanitarian crisis and moreover, the need for a solution.
CATTLE
Increasing supply and sluggish winter demand
US 90CL prices fall on weakening US demand and high domestic slaughter
Biosecurity threatens export demand.
As we eased out of summer, for a while there it looked like the cattle market would remain in a blissful state where not just the leaves of Autumn were golden, but there would be a resurgence of good times and sustained steep climbs in price again.
LAMB & SHEEP
Old season lamb supply & quality issues dragging prices
A tight global supply balance favours a long-term outlook
Switch from Merino’s to meat breeds.
A cold and wet winter comes with challenges. Gaining, or even just maintaining weight, becomes difficult. Worms, infections, and disease emerge putting a focus on animal health management. All in all, productivity, reproductive performance and condition of sheep and lambs is generally lacking. While broadly the seasonal conditions in the south have been very favourable, large parts of NSW have been dealing these challenges which has contributed to the softer lamb market.
WOOL
Fine Merino prices had a great quarter, aided by a weaker AUD
Crossbred wool continued to sell at high volumes for a low price
Faulty wool continued to cause problems.
The Australian dollar started the quarter at US76 cents and finished it at US69 cents. While the 16.5 to 17.5 MPG’s returned in June to their June 2021 peaks, in US dollar terms they trended higher to reach late 2018 levels. As a general rule, wool prices in Australian and US dollar terms follow similar trends and cycles, simply at different price levels.
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