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Australian Weekly ABARES Report


10 October 2013

Australian Weekly ABARES Report - 10 October 2013Australian Weekly ABARES Report - 10 October 2013


The Australian Bureau of Agricultural and Resource Economics and Sciences

Summary of key issues

  • During the past week rainfall was mainly restricted to Tasmania and the coastal fringes of mainland Australia, while maximum temperatures were up to 8 degrees above average across large areas of western and northern Australia.

  • Upper layer soil moisture levels across much of eastern Australian declined further during September 2013 resulting from below average rainfall and well above average temperatures.

  • Despite northerly winds and high temperatures placing some South Australian crops under stress, rainfall during September will assist in limiting downgrades and yield losses in a number of regions.

  • Limited pasture availability in central and southern Queensland is leading to restricted supply of traditional supplementary feed sources.

  • Water storage levels in the Murray–Darling Basin have increased by 211 gigalitres this week to 84 per cent of total capacity.

  • According to the Grains Industry Association of Western Australia (GIWA), favourable rainfall during September has significantly increased winter crop prospects across the state.

  • The world wheat indicator price (US No. 2 hard red winter, free on board Gulf ports) averaged US$333 a tonne in the week ending 8 October 2013, compared with US$325 a tonne in the previous week.

  • The world canola indicator price (Rapeseed, Europe, free on board Hamburg) averaged US$509 a tonne in the week ending 8 October 2013, compared with US$498 a tonne in the previous week.

  • The world sugar indicator price (Intercontinental Exchange, nearby futures, No. 11 contract) averaged US18.6 cents a pound in the week ending 9 October 2013, around 5 per cent higher than in the previous week.

  • The saleyard prices of lamb fell in all states in the week ending 4 October 2013. The largest fall occurred in Victoria where the indicator price (18–22kg fat score 2–4) fell by around 9 per cent to average 402 cents a kilogram.

Climate

Notable events

  • During the past week rainfall was mainly restricted to Tasmania and the coastal fringes of mainland Australia, while maximum temperatures were up to 8 degrees above average across large areas of western and northern Australia. With similar rainfall conditions forecast over the coming week, there is likely to be a further build up of heat across central Australia, which may result in above average temperatures across southern Australia in the coming weeks.

  • Upper layer soil moisture levels across much of the Queensland and Victorian wheat-sheep zones continued to decline during September 2013 in response to below average rainfall and well above average temperatures. In Western Australia soil moisture levels across much of the wheat-sheep zone have improved in response to above average rainfall during September.

  • Northerly winds and high temperatures are placing some South Australian crops under stress, with local agronomist suggesting that some barley varieties are particularly vulnerable to yield losses resulting from the windy conditions. Despite the unfavourable production conditions rainfall during September will assist in limiting downgrades and yield losses in a number of regions.

  • Feed shortages continue to be an issue for many graziers in central and southern Queensland. With limited pasture availability in numerous regions, supplies of traditional supplementary feed sources such as cotton seed and molasses are becoming harder to acquire. There are reports that non-traditional feed sources of almond hulls, meal pellets and cotton seed meal are being sourced to fill the supply gap.

  • Rainfall deficiencies at the 12-month scale (October 2012 to September 2013) have seen slight improvement across southern Australia and an increase in the area of deficiencies in across Queensland Longer term rainfall deficiencies for the 18-month period (April 2012 to September 2013) have also seen some improvement across southern Australia and worsening in Queensland and Central Australia (Bureau of Meteorology ‘Drought Statement’, 3 October 2013).

  • Neutral El Niño/Southern Oscillation (ENSO) conditions persist across the tropical Pacific Ocean. Climate models suggest that conditions are likely to remain neutral for the remainder of spring and summer 2013-2014. The Indian Ocean Dipole also remains in a neutral phase (Bureau of Meteorology ENSO ‘Wrap-up’, 8 October 2013).

Rainfall this week

For the week ending 9 October 2013 rainfall was restricted to Tasmania, coastal regions of Victoria, Queensland, Northern Territory and south-west Western Australia. The highest recorded rainfall total for the week was 65 millimetres at Mount Read in western Tasmania. For further information, go to www.bom.gov.au/climate/current/weeklyrain.shtml.

Rainfall for the week ending 9 October 2013

©Commonwealth of Australia 2013, Australian Bureau of Meteorology          Issued: 09/10/2013

Commodities

Production and commodities

  • The world wheat indicator price (US No. 2 hard red winter, free on board Gulf ports) averaged US$333 a tonne in the week ending 8 October 2013, compared with US$325 a tonne in the previous week.

  • The world canola indicator price (Rapeseed, Europe, free on board Hamburg) averaged US$509 a tonne in the week ending 8 October 2013, compared with US$498 a tonne in the previous week.

  • The Australian canola indicator price (Portland, Victoria) averaged $484 a tonne in the week ending 7 October 2013, compared with $474 a tonne in the previous week.

  • The world cotton indicator price (the Cotlook ‘A’ index) averaged around US91.7 cents a pound in the week ending 9 October 2013, compared with US92 cents a pound in the previous week.

  • The world sugar indicator price (Intercontinental Exchange, nearby futures, No. 11 contract) averaged US18.6 cents a pound in the week ending 9 October 2013, around 5 per cent higher than in the previous week. This week’s price is the highest recorded since the week ending 13 March 2013, when the world sugar indicator price was US18.8 cents a pound.

  • The Brazil Sugar Industry Association revised its forecast for sugar production in 2013-14 in the central south region of Brazil (which produces around 90 per cent of Brazil’s sugarcane) to 34.2 million tonnes. While this forecast represents a downward revision from the 35.5 million tonnes forecast in April 2013, if realised it would be a record level of production.

  • According to the Grains Industry Association of Western Australia (GIWA), favourable rainfall during September has significantly increased winter crop prospects across the state. GIWA has revised its forecast for total winter crop production in Western Australia to reach between 13 and 14 million tonnes, compared with between 8 and 9 million tonnes it forecast in June.

  • Changes to wholesale prices of selected fruit were mixed in the week ending 5 October 2013. The wholesale prices of blueberry, pineapple (smoothleaf) and watermelon (seedless) were lower than the previous week, while the prices of avocado (hass) and strawberry were higher.

  • Changes to wholesale prices of selected vegetables were mixed in the week ending 5 October 2013. The wholesale prices of beans (round stringless) and iceberg lettuce were higher than the previous week, while the price of tomatoes (field gourmet) was lower.

  • The Queensland young cattle indicator price (330 – 400 kg live weight C3) increased by 1 per cent in the week ending 4 October 2013 to 323 cents a kilogram. Young cattle prices in New South Wales and Victoria increased by 1 per cent and 2 per cent to 343 cents a kilogram and 367 cents a kilogram, respectively.

  • The saleyard prices of lamb fell in all states in the week ending 4 October 2013. The largest fall occurred in Victoria where the indicator price (18–22kg fat score 2–4) fell by around 9 per cent to average 402 cents a kilogram. In South Australia and Western Australia, the indicator price fell by around 5 per cent and 4 per cent to average 405 cents a kilogram and 369 cents a kilogram, respectively. In New South Wales, the indicator price fell by 1 per cent to 430 cents a kilogram.

  • The Australian Eastern Market indicator price for wool was largely unchanged in the week ending 3 October 2013, averaging 1099 cents a kilogram clean. The total number of bales offered at auction was 9 per cent lower, compared with the previous sale.

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