Wheat prices lead to 3.2 per cent increase in NAB Rural Commodities Index

The National Australia Bank’s Rural Commodities Index is now around levels seen in April 2023, having increased recently thanks to a rise in wheat prices, according to NAB’s May Rural Commodities Wrap.

The Rural Commodities Index rose by 3.2 per cent month-to-month in April as a result of wheat prices which increased about four per cent month-on-month in monthly average terms.

It comes after the index slipped 7.5 per cent month-to-month in March.

NAB group economics associate director Lea Jurkovic said downgraded expectations of global wheat supply, particularly from Russia, had helped hold up the global prices.

“Canola and feed barley also saw price increases of around four per cent, while the price of malting barley remained flat,” Ms Jurkovic said.

“Prices for fruit, vegetables, lamb and dairy also recorded increases in the month. Cattle prices were relatively unchanged in the month, rising around 0.7 per cent in monthly average terms.”

Ms Jurkovic said trade lamb prices rose about 6.5 per cent month-on-month in April in monthly average terms, largely retracing their fall in March.

“Wool prices were little-changed in the month, slipping 0.5 per cent month-on-month in April in monthly average terms. Confidence among producers improved towards the end of April with strengthening demand from several large Chinese mills,” she said.

Ms Jurkovic said fertiliser prices fell around 15 per cent month-on-month in April in monthly average terms.

“Falls in the prices of urea, due to the falling price of ammonia, and diammonium phosphate drove the fall; the price of natural gas increased slightly,” she said.

“In the Australian economy, inflation continued to moderate in Q1 to four per cent year-on-year on the trimmed mean measure but came in slightly stronger than expected.

“The Federal Budget, announced in May, includes key measures such as the Future Made in Australia program (which includes solar panel manufacturing), the extension of the small business instant asset write-off, and cost of living relief through a $300 energy bill subsidy for each household.”

National rainfall in April was 26 per cent below the long-term (1961-1990) average, according to the Bureau of Meteorology.

There were mixed seasonal conditions across the country following the El Nino event which ended in April.

The north and east experienced above-average rainfall, while other regions had below-average rainfall.

NAB predicted rainfall to be above average for much of inland Australia from June to August.