Agriculture

Global food prices are rising and the trend is likely to continue according to ANZ Bank, with less land, climate change and increased use of biofuels all contributing factors.

CommBank expects a structural change in global food markets will keep the pressure on inflation, UBS suggesting retailers are better placed than suppliers to deal with the change.

Base metal prices have peaked according to National Australia Bank but there is further upside in the bulks and rural commodities, particularly wheat and dairy.

Austock Securities expects further consolidation among companies in the agricultural sector and has run through its views on the major players.

Positive momentum carried through on Wall Street last night. Base metals in London posted the gains they would have made yesterday had the exchange not closed before the Fed announcement.

Wall Street range traded last night as oil and wheat posted record highs and the dollar fell to an all time low against the euro. The I-word is back.

Despite the credit crunch, commodity investment instruments are holding their own.

Global inflation levels have been held in check during the emerging markets boom as China in particular has exported deflation. Will it be different now?

Skyrocketing food prices pushed China’s monthly inflation rate to the highest level in a decade in July.

With 40% of total exports coming from soft commodities a positive outlook for meat, forestry and dairy prices Macquarie suggests New Zealand’s GDP growth will continue to be solid.