Australia agribusiness May 2025: Sowing the seeds of success

Wheat and Barley: Ceasefire talks in Ukraine, favourable weather, and currency fluctuations have influenced wheat prices in April, leading to a drop in CBOT and flat ASX. In the meantime, Australia begins its sowing period and monitors the key factors influencing local feed demand.

Canola: China imposed 100% tariffs on Canadian canola oil and meal, significantly impacting the market already strained by US-Canada tariff disputes. This led to a sharp drop in prices and raised questions about future marketing strategies amid global soybean supply pressures and weather conditions.

Beef: Rains in late March and early April have positively impacted cattle markets, with restocker cattle prices lifting 10% to 16% in April as producers were able to hold onto their cattle. We still expect prices to remain relatively steady around current levels given large numbers and good demand.

Sheepmeat: Finished lamb prices lifted in April. While shorter weeks due to public holidays make it harder to compare, higher prices and lower yardings might be the indication that lamb supplies are starting to contract. If this is the case, prices may rise further as buyers compete for more limited supplies.

Wool: Wool prices have found good support since last September, however both the Eastern Market Indicator and the Western Market Indicator declined month-on-month. This largely appears to be a result of the Australian dollar pushing higher.

Cotton: ICE #2 Cotton futures traded with heavy volatility in April, with US trade policy the primary driver. Meanwhile, funds reduced their short-position slightly, but the position still remains sizeable.

Farm inputs: Urea, phosphate, and potash prices rose across the board on a month-on-month basis. For urea, India's recent tender pushed prices higher. Meanwhile, for phosphate prices, higher production costs and rising global demand continue to keep prices trading above historical averages.

Dairy: Global dairy commodity prices remained mostly steady through April. Fundamentals of the market are largely balanced, with limited milk supply growth combatting a fragile demand recovery.

Consumer foods: Interest rate and FX: Consumer confidence among Australian households has slipped in recent weeks. This downturn sentiment is unsurprising given global economic uncertainty and softer equity markets.

Oil and freight: Oil prices hit a four-year low in April due to increased supply from OPEC+ and expectations of lower global growth driven by US tariffs. Freight rates have fallen as attempts by US importers to front-run the imposition of tariffs subside.