Australia agribusiness September 2025: Seizing spring's momentum

Here are the main highlights for some of Australia's key commodities and economic influences for this month. The full report provides an overview of the developments to watch in the upcoming weeks.

Wheat and barley: Global wheat supply remains stable post Northern Hemisphere harvest. However, sluggish export activity is adding bearish pressure on prices ahead of the Australian harvest. Carryover stocks are also weighing on sentiment and putting downward pressure on new crop prices.

Canola: Canada's increased supply and loss of access to the Chinese market are about to shift global canola trade dynamics with Canadian stocks rising year on year. Trade tensions between the US and China add further uncertainty, with potential spillover effects into the canola sector.

Beef: Favourable conditions – including good or improving seasons, strong US demand, and good feedlot margins – are supporting a rise in cattle prices. Optimism and buying activity may push prices higher and faster than previously expected.

Sheepmeat: Lamb prices continue to drift down as slaughter capacity is adjusted and new season lambs enter the market. East-west sheep price spreads suggest that Western Australia may no longer be as attractive a market as it was during the previous restocking phase, potentially meaning a much more limited pool of replacement stock.

Wool: The EMI increased 0.6% MOM. Auctions returned following the winter recess, with demand looking relatively good. On the production side, the Australian Wool Production Forecasting Committee recently projected a 10.2% YOY decline in 2025/26 wool production.

Cotton: Although ICE #2 Cotton futures lost ground month-on-month, Australian cash prices rose modestly supported by a weaker Australian dollar. Looking ahead, the key focus will be on US weather conditions. On the demand side, the market will be closely monitoring whether the Federal Reserve cuts rates.

Farm inputs: Urea prices rose in early August, driven by strong Indian import demand. However, news that China will increase its export allocations for both urea and phosphates helped ease markets later in the month.

Dairy: With milk production gaining momentum in key regions, the global markets appear poised to remain well supplied with milk. As the Oceania peak approaches, commodity markets may face some downward pressure.

Consumer foods: Monthly food inflation data from the ABS showed a 3% YOY increase in the food basket in July. This was down from a 3.2% rate in June. Food inflation should remain close to long-term averages in the near term.

Interest rate and FX: The RBA cut the cash rate to 3.60% in August but is unlikely to deliver a follow-up cut in September. We expect three more cuts in the cycle, but only one of those to occur in 2025.

Oil and freight: Oil prices fell in August as markets retraced some of the sharp gains seen in late July after US President Donald Trump threatened to impose secondary sanctions on buyers of Russian crude.