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Insights February 2021 - All commodities

8 February 2021 |Insights
Farm equipment on field

Insights February 2021 - All commodities

8 February 2021 |Insights

Positive start to 2021 as prices rise on the back of demand from China and wet conditions persist.

The completion of the 2020-21 harvest has resulted in the second highest level of production on record for wheat, barley and canola. The bumper crop is corresponding with a period of heightened demand. Culminating in exporters being booked out until April, as Australian grain prices become increasingly attractive to international buyers. The single largest destination for Australian wheat in 2021 is currently China. Driven by an appetite for stockpiling and a resurgence in the countries pig herd.

Grain isn’t the only commodity benefitting from increased Chinese demand. Wool prices have outperformed expectations, climbing back towards pre-COVID-19 levels. Prices for fine wool are expected to remain supported this month as China increases its Australian wool quota by five per cent.

A favourable rainfall outlook is expected to increase demand from restockers, keeping prices for sheep and cattle well supported. As wet conditions in southern states persist the need for supplementary feeding is expected to decline, resulting in high levels of on farm feed and lower input costs over summer.

The Rural Bank Insights team provides research and analysis based on the latest data, trends and news. Throughout the year the team produces timely and relevant reports to support business decisions on farm.

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