Prices for dairy commodities rose in August, varying from 3 per cent for cheddar to 28 per cent for whole milk powder (WMP), Rabobank said in its September review. The global dairy trade auction results lifted WMP a further 24 per cent from the 25 per cent rise in August.

The review said WMP's buoyancy was due to strong demand from China and large stockpiles of skimmed milk powder and butter in the northern hemisphere. This brought a lift in Australian dollar dairy export prices, which prompted Murray Goulburn to raise its opening price for the 2009-10 season by 3.5 per cent.

In the grain sector, Rabobank said world prices were now at their lowest since April 2007. Yields and quality in the northern hemisphere harvest were above expectations, which would contribute to a further easing in wheat prices in the second half of the year.

Rabobank had also lowered its wheat price outlook for the next 12 months as world stock levels were expected to build for the second season in a row.

In Australia, Rabobank's estimate of this year's wheat crop remained at 22.8 million tonnes, with crop conditions reported as average to better-than-average in many regions. Commonwealth Bank lowered its estimate of Australia's wheat crop to 22.2 million tonnes.

In beef, Rabobank said subdued export demand and a strong Australian dollar pushed export prices down 8 per cent at the end of August compared with the same time last year.