Australia agribusiness monthly October 2026: Navigating risks and seizing opportunities

Climate: September rainfall supported winter crop and pasture conditions across southern Australia, while continued dryness in Queensland and northern New South Wales sustained production risks. A strengthening El Niño remains a key watch point heading into summer, increasing the likelihood of warmer and drier conditions across eastern Australia.

Wheat and barley: Black Sea export constraints and broader shipping disruptions are limiting grain availability despite a stable global balance. Wheat and barley markets are likely to remain headline-driven, supporting a continued upward price trajectory.

Canola: Canola markets remain supported by lower production, Black Sea export disruptions, and firm vegetable oil demand. Rising biofuel use and tighter palm oil supplies are further supporting global oilseed prices.

Beef: Local seasonal conditions remain the key driver of regional cattle prices. October will be critical in building producer confidence and supporting prices. The resetting of quotas in the new year is also starting to influence the market, given lead times for feeding programs and shipping.

Sheepmeat: The market is following the 2025 playbook, albeit two weeks early. Prices have eased but may fall further as the heavier new-season lambs start to hit the market. However, ongoing limited supplies will prevent them dropping too far.

Wool: Australian wool markets softened modestly through September, with finer merino wools outperforming broader types. Demand remains cautious despite strong export values, with attention focused on Northern Hemisphere winter demand and consumer spending trends.

Cotton: Cotton prices eased during September as broader economic uncertainty and investor caution outweighed tightening supply fundamentals. Global cotton stocks are forecast to decline due to production falling below consumption, but demand remains the key uncertainty, with buyers maintaining a cautious approach and waiting for greater confidence in global textile markets.

Farm inputs: Fertiliser markets remained highly volatile through September, with elevated energy costs, Middle East shipping disruptions, and European production curtailments supporting nitrogen prices. Phosphate markets stayed tight despite softer demand, while Australian urea imports reached 97% of seasonal requirements, helping maintain domestic supply security.

Sugar: Sugar prices corrected in the second half of September after reaching a 17-month high. Brazilian harvest disruptions and Indian dryness remain key market drivers. On the demand side, the Indian government allowed large sales to control domestic prices ahead of the October festive season.

Dairy: Dairy commodity prices found support in September, although butterfat prices remained weak, and gains in protein prices were led by skim milk powder. Global fundamentals are transitioning towards a better balance as supply growth moderates.

Consumer foods: Consumer spending has remained surprisingly resilient. However, further rate rises would intensify pressure on mortgage-holding households, likely weighing on discretionary spending. Against this backdrop, consumer sentiment weakened sharply in early September.

Interest rate and FX: The RBA struck a hawkish tone in September as Governor Bullock warned that upside risks to inflation were materialising. Nevertheless, with the labour market inching closer to balance, RaboResearch expects the RBA to be cautious about further rate rises.

Oil and freight: Oil prices rose in September after drone strikes shut down Saudi Arabia’s East-West Pipeline. The prospect of a diesel export ban in the US is creating the risk of further upward pressure on prices in an already pressured market.