Australia agribusiness December 2025: Merry markets from wheat to treats

Wheat and barley: Global wheat prices remain under pressure from abundant supply and rising stocks, with Australian basis offering relative strength. However, limited upside is expected unless a major supply shock or geopolitical shift occurs.

Canola: EU canola imports are set to fall as production rebounds to near-average levels, while Canadian stocks rise on the back of higher output and tepid crushing growth. Australian production is soaring, year-on-year, with GM canola’s share increasing and limiting price upside.

Beef: Cattle prices continue to reflect seasonal conditions. Finished and heavy stock are performing better given the strong export markets, while restocker cattle prices are more reflective of seasonal conditions and producer sentiment.

Sheepmeat: Lamb and sheep prices are still bouncing around at high levels. Slaughter numbers appear to be stabilizing around the five-year average, and the lower volumes of lambs may just be starting to temper the buying actions of processors.

Wool: Wool prices have remained firm in recent weeks, with the Eastern Market Indicator up 6% MOM. Economic indicators show mixed signals for wool demand: EU consumer confidence is trending higher, while Chinese retail sales growth remains lacklustre.

Cotton: ICE #2 Cotton futures fell 3.8% MOM. Cotton markets have faced additional pressure in recent weeks, with the USDA’s WASDE report indicating that global production is likely stronger than previously expected.

Farm inputs: It was a mixed month for fertiliser prices, with phosphate prices down around 5% MOM, while urea rose 2%. Although RaboResearch expects urea prices to ease over the next six months, short-term downside potential may be limited by strong buying activity from India.

Dairy: Dairy commodity prices are continuing to soften. A spike in milk production in most export regions is weighing on markets, which will continue into 1H 2026. The weaker commodity prices are pulling down farmgate prices in most dairy export regions.

Consumer foods: Food inflation was steady at 3.2% in October despite big lifts in red meat prices. Consumer confidence jumped in November, marking its first positive reading since early 2022 and the highest level in seven years.

Interest rates and FX: The recent run of strong economic data continued in November and has placed a big question mark over the prospect of further cuts to the RBA cash rate.

Oil and freight: Oil prices continued to track lower in November and are likely to fall further early next year. Diesel prices are being supported by a lack of refining capacity and a consequently tight supply-demand picture.