Australian commodity September update

Australia is on track for another bumper winter crop, despite challenging conditions across northern and western growing regions. Subdued barley prices and softer wheat basis are also tempering the bullish production story and remain a watchpoint heading into harvest.

Meanwhile, the feedlot sector’s necessity to maintain capacity is sustaining demand for feeder cattle while a tight flock and favourable conditions entering spring are supporting lamb prices. Wool markets also remain elevated, though subdued retail demand in Europe and China is a close watch for the sector through spring.

Out in the orchards, a noted decline on last year's stone fruit volumes is forecast following reduced cold chill hours after an unseasonably warm winter. However, the dry spring forecast bodes well for quality.

Ag sector outlook

• Cattle: The US tariff shift will primarily impact demand for processor cows. In contrast, young cattle prices are supported by domestic demand, while the feedlot sector’s necessity to maintain capacity is also sustaining demand for feeder cattle, even with tight margins.
• Cropping: Australia is on track for a large 61 million tonne winter crop, but southern production strength is masking northern weakness, while subdued barley prices and softer wheat basis temper the bullish production story.
• Dairy: We estimate the Australian milk pool having reached at least 8.35 billion litres for 2025/26 – 0.5 per cent larger than the previous season.
• Horticulture: A downward trend in fruit prices is limiting returns for growers with margins further compressed by a resurgence in the cost of inputs over recent months.
• Sheep: Sheepmeat processing rates are gaining momentum following the quieter winter months, but throughput remains slower compared to previous years.
• Wool: Despite a softer start to season 2026/27, wool sits well above previous season levels, though a stronger Australian Dollar means further seasonal gains depend on recovering global consumer demand.
• Climate and carbon: While welcome, late winter rain has significantly elevated disease pressures and demand for fungicides, which have been harder to secure as a result. There are risks to crop quality and yields if not applied when needed.