Rabobank's Australia and New Zealand Agribusiness Review for June 2010 has been released.

Prepared by the bank's Food & Agribusiness Research and Advisory division, the report provides monthly commentary on Australian and New Zealand economic and agricultural conditions. Highlighted in this report:

• May brought welcome rainfall across most of Australia, excepting Queensland, and also saw warm temperatures across much of Australia. However water storage levels in the Murray-Darling Basin have improved only marginally, and the outlook across many cropping regions is for below average rainfall. New Zealand also experienced welcome rainfall across many dry areas, and the outlook is for average rainfall and warm weather for winter. The El Niño event across the Pacific has officially finished.
• While the global economic recovery continues, sentiment has turned and the impacts of the European debt crisis have spanned virtually all markets. The outlook for Asian economies remains strong, and the US outlook is also positive even though recent jobs data has disappointed. The Australian economy continues to expand, although is not unaffected by the softening in global demand and the withdrawal of stimulus spending. As a result the Reserve Bank of Australia held the Official Cash Rate (OCR) at its May meeting. In New Zealand the recovery is also growing gradually, although it is not without its points of fragility. The Reserve Bank of New Zealand is expected to increase the OCR this month or next.
• The Australian and New Zealand dollars have shifted down as a result of global risk aversion; both are down almost 10 percent against the US dollar in May.
• Global grain prices have been affected by the European debt crisis with investor sentiment pushing global wheat prices to their lowest levels since September 2009. Good seasonal conditions along Australia's east coast have continued, raising expectations for the domestic crop; canola is also benefitting from a return to crop rotations.
• Global beef prices remain flat, although cattle prices in Australia and New Zealand have stayed well above their 2009 levels, and the depressed levels of local currencies suggest there may be room for further modest rises. Lamb and sheepmeat prices remain firm, backed by strong demand and restricted supply.
• Global dairy prices remain firm, slipping only a little in recent trade auctions despite an increase in the US dollar; the combination of strong pockets of demand and sustained falls in production have made dairy prices indifferent to the recent European debt crisis. The outlook for milk pricing is also positive.
• Oil prices have slipped over the last month, following the market sentiment, and have been trading around the USD70/barrel mark.

A full copy of the report can be downloaded by following this link.