Update
Australia agribusiness monthly June 2026: Dual risk dynamics, input inflation and weather variability
Here are the main highlights for some of Australia’s key commodities and economic influences this month. The full report covers the developments to watch in the upcoming weeks.
Canola: Global canola production is rising, but stronger crushing and biofuel demand are absorbing supplies and reducing exports. Prices remain supported as energy markets and policy continue to favour vegetable oils.
Farm inputs: Input prices remain high and volatile, driven by energy markets, supply constraints, and policy restrictions. Rising costs are eroding farm margins and forcing demand rationing despite only temporary price relief.
Dairy: Record whey prices continue to dominate global dairy markets settings. Meanwhile, new season milk pricing in Australia and New Zealand has been announced and is mostly steady with 2025/26 prices, as a recovery in commodity values supports early price signals.
Consumer foods: Food inflation falls to its lowest level since December 2021, but consumers are not out of the woods. Meanwhile, consumer confidence remains in the doldrums.
Interest rate and FX: As forecast, the RBA raised the cash rate by 0.25ppts in May to 4.35% – equal to the previous cycle high. There were some further signs of economic slowdown in the month, and the RBA sent some signals that it may be nearing the end of the hiking cycle, but we are maintaining our forecast of an August hike.
Oil and freight: Oil prices fell on peace hopes in late May, but the Strait of Hormuz remains mostly closed and a deal is proving elusive. RaboResearch has changed its baseline forecast for the strait to remain closed until September and raised Q3 and Q4 oil price forecasts to USD 120/bbl and USD 100/bbl, respectively