Australia agribusiness November 2025: Positive trade signals amid bearish fundamentals

Wheat and barley: Despite abundant global grain supplies, wheat prices have found support in recent weeks, with gains largely driven by Russia-US tensions. The Australian basis could face headwinds, as RaboResearch expects the Australian dollar to rise over the next 12 months, and carryover into 2025/26 remains high.

Canola: Canola prices have been supported in recent weeks by a sharp rise in CBOT soybean prices following the announcement of a US-China trade framework. The market will be watching closely for further developments.

Beef: Cattle prices remain highly contingent on seasonal conditions, with drier weather through September and October seeing prices ease. With the forecast for November showing average to above-average rainfall we may see prices stabilise and possibly lift.

Sheepmeat: All categories of lamb and mutton have seen prices decline over the last month as supplies increase with new season lambs entering the market. We believe prices may ease further as numbers rise, but ongoing limited supplies will provide a floor in the market.

Wool: Wool prices fell in October, with the EMI down 9% MOM. Despite this decline, prices remain 24% higher than at the start of the year.

Cotton: ICE #2 Cotton futures have found support in recent weeks, rallying 3.3% since mid-October. The recent price strength is largely driven by optimism around US-China trade discussions, which appear to be progressing well.

Farm inputs: RaboResearch sees downside risk for urea and phosphate prices due to poor global affordability. Current market dynamics suggest a potential pullback in usage, as buyers remain unwilling to absorb current high prices.

Dairy: Global fundamentals have slowly become more bearish for prices. Milk supply growth is ramping up led by record milk flows during New Zealand's peak season. Some welcome news locally, with small increases in farmgate milk price announced by major dairy processors.

Consumer foods: Food inflation came in at 3.1% YOY for Q3 2025. Egg prices were the main category still posting higher inflation. However, firmer livestock prices were leading to upward price pressure in the red meat aisle.

Interest rates and FX: Stronger than expected Q3 inflation has likely nixed the chances of another rate cut in 2025. RaboResearch now projects just one more cut, to arrive in May next year.

Oil and freight: Oil prices were pressured lower in October by signs of ample global supply, despite recent sanctions targeting Russia's major oil firms providing some support to prices in the middle of the month.