ASB Commodity index hits record in US Dollar Term

ASB commodity index reached another high in US dollar terms at the weekend.

The sheep/beef and forestry indices were also at individual highs.

The New Zealand dollar also lifted last week, increasing to more than US80c.

ASB economist Chris Tennent-Brown said beef prices remained very strong but drifted lower during the past week.

"The New Zealand dollar lift over the past two weeks will be weighing on local beef prices and the fact US imported prices also drifted lower did not help matters. However, the weather in the northern hemisphere is improving and as the US is getting ready for the barbecue season, we are not expecting to see continued declines from the US market."

Grain markets continued to be "finely poised", he said.

The increasing cost of corn was prompting much speculation about livestock producers assessing the feasibility of a change to wheat as a feed input. Changes to the beef diet needed to be gradual, so a move to wheat would not occur quickly.

Lamb prices were more than $100 per lamb (16kg CWT) in the past two weeks, Mr Tennent-Brown said.

"This is the only time we have recorded prices at these levels within the index, which started in 1993."

The record reflected the strong market. In some areas, prices were near $6.90 a kg. Sheep prices should be well supported in coming months and ASB was picking a strong start to the spring market, he said.