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Improved seasonal conditions look likely to make for better performance by Australia’s agricultural sector in 2008, giving east coast farmers a chance to recover from years of crippling drought.
Given the right weather, farmers in many cropping areas have vastly improved chances of taking advantage of the current global soft commodities boom, says Rabobank’s head of food and agribusiness research, Bill Cordingley.
“I think we’re in a better position this year than we were this time last year that’s for sure, due to some fantastic international commodity prices,” Mr Cordingley says.
“Obviously it’s early in the year and in the second half of the year we’d expect to see some of those commodity prices moderate somewhat as global crop conditions become better known and better understood. The weather premium starts to be removed from some of the pricing but fundamentally we’re at much higher prices this year than we were last year.”
Improved rainfall in some cropping areas, especially in eastern Australia and the prospect of a continuing La Nina weather pattern bode well for bigger winter crop plantings. Farmers will be keen to take advantage of the excellent prices coming out of tight markets.
“In terms of price, the best performing in the global market right now are the hard wheats, and soy beans and canola. They’re all going very well in terms of the international grains and oilseeds prices are at record levels.
“Some, I guess in many cases, they’ve doubled over the last 12 months so they’re very positive,” Mr Cordingley says.
In the month from January 8 to February 8 the Australian Wheat Board’s APW pool price jumped from $419 to $439 Australian a tonne, while in the same period Chicago Board of Trade Wheat Futures jumped to US943 cents per bushel, or around $A450 a tonne.
By February 20 Chicago March wheat futures were up to 1036 cents per bushel. Canola futures for March 2008 have hit $C665.90 a tonne, or $A714.49, on Canada’s Winnepeg Commodity Exchange.
Cotton is another agricultural commodity likely to bring better returns in the 2008-2009 season, providing irrigation water is available at planting time. Bill Cordingley says the prospect of more cotton this year is likely, providing water is available.
“I think the signs are positive that some of the storages in the northern reaches of the Murray-Darling basin into Queensland will be in condition to at least have an improved allocation from last year, and at the same time cotton prices seem to be firming on the international markets on the basis that expectations are that cotton plantings in the US will be down substantially this year, on top of last year’s decline,” he says.
“Again, (they are) just losing out in the fight for acres with the grains and oilseeds, corns, wheats, canola and soy beans that are attracting so much more acreage due to these record prices. So the prospects are for reasonably good prices for cotton, certainly not as explosive as in the grains but, and if production increases obviously that sector will do much better this year.”
Given the right weather, farmers in many cropping areas have vastly improved chances of taking advantage of the current global soft commodities boom, says Rabobank’s head of food and agribusiness research, Bill Cordingley.
“I think we’re in a better position this year than we were this time last year that’s for sure, due to some fantastic international commodity prices,” Mr Cordingley says.
“Obviously it’s early in the year and in the second half of the year we’d expect to see some of those commodity prices moderate somewhat as global crop conditions become better known and better understood. The weather premium starts to be removed from some of the pricing but fundamentally we’re at much higher prices this year than we were last year.”
Improved rainfall in some cropping areas, especially in eastern Australia and the prospect of a continuing La Nina weather pattern bode well for bigger winter crop plantings. Farmers will be keen to take advantage of the excellent prices coming out of tight markets.
“In terms of price, the best performing in the global market right now are the hard wheats, and soy beans and canola. They’re all going very well in terms of the international grains and oilseeds prices are at record levels.
“Some, I guess in many cases, they’ve doubled over the last 12 months so they’re very positive,” Mr Cordingley says.
In the month from January 8 to February 8 the Australian Wheat Board’s APW pool price jumped from $419 to $439 Australian a tonne, while in the same period Chicago Board of Trade Wheat Futures jumped to US943 cents per bushel, or around $A450 a tonne.
By February 20 Chicago March wheat futures were up to 1036 cents per bushel. Canola futures for March 2008 have hit $C665.90 a tonne, or $A714.49, on Canada’s Winnepeg Commodity Exchange.
Cotton is another agricultural commodity likely to bring better returns in the 2008-2009 season, providing irrigation water is available at planting time. Bill Cordingley says the prospect of more cotton this year is likely, providing water is available.
“I think the signs are positive that some of the storages in the northern reaches of the Murray-Darling basin into Queensland will be in condition to at least have an improved allocation from last year, and at the same time cotton prices seem to be firming on the international markets on the basis that expectations are that cotton plantings in the US will be down substantially this year, on top of last year’s decline,” he says.
“Again, (they are) just losing out in the fight for acres with the grains and oilseeds, corns, wheats, canola and soy beans that are attracting so much more acreage due to these record prices. So the prospects are for reasonably good prices for cotton, certainly not as explosive as in the grains but, and if production increases obviously that sector will do much better this year.”
