BankWest Agribusiness Market Analyst Dan Fels and State Manager for HBOS Treasury Services Pierre Martin gave a talk on what 2007 might hold for local industry in Dalwallinu in March.
The seminar, held at the Wheatlands Motel Function Centre on the 14th March, gave insights into the outlook for commodities, the Australian Dollar and interest rates.
BankWest's Dan Fels said with many farmers coming out of a drought year and stock numbers low, restocking was likely to be an expensive option.
"A strategy adopted by many farmers is to plant wheat after a drought," he said. "Given the high forward price expectation for most grains, we can expect farmers to maximise planted area if possible."
"There is potential for high overdraft utilisation with this strategy, so it's also important that cash flow budgets are carefully managed."
Mr Fels also went on to say that the climate outlook, based on analogue year rainfall and on longer range forecasting, was reasonable.
"This reinforces the view that we are going to see a big cropping year across Australia," he said. "The analogue year rainfall is predicting an average rainfall for the west coast growing season contrasted with a wet season in the east."
Mr Fels said that compared with price jumps seen in the minerals sector in 2006, agricultural commodities had yet to experience a boom.
"But prices for most soft commodities are good and the expectation of most forecasters is for prices to remain buoyant," he said.
HBOS Treasury Services Pierre Martin said interest rate uncertainties meant the US and Australian economies should be watched carefully.
"We have strong wage growth and record employment in Australia at the moment," he said.
"This coupled with uncertain energy prices could see a global rate tightening bias and make many markets sensitive to inflation."
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