Grain – Hay Report – 22 November 2013

International & National Summary – Grain:

• Poor US exports sales and weaker corn prices have brought down wheat values for the week. CBOT December futures ended the week down 4.00 USc/bu to close on Monday night at 642.25 USc/bu. Speculators continue to bet that prices will fall as the net short in CBOT grows further.
• Trade activity increased on the global market with a number of key players returning to the table. Brazil re-entered the market for US wheat for the first time since the Argentinian frost event. Egypt purchased 240,000mt and 180,000mt from France and Romania respectively. The EU has continued its strong export program granting a further 612,00mt of export licenses, putting YTD exports at 10Mt compared to 6.4Mt last year.
• The week saw the Australian dollar relatively unchanged compared to the week before marginally up 0.0031 USc. The dollar closed at 93.88USc and its fall from grace earlier in the year has supported Australian grain values throughout the period.
• National grain production estimates in Australia continue to shift. NAB decreased their estimate 0.3Mt to 24.7Mt reflecting yield downgrades in northern Victoria and southern NSW. Alternatively CBH have forecasts at 26Mt.
• Solid underlying fundamentals continue to support Australian grain prices. Strong domestic demand and indications of light grower sales are seeing Australian values perform well against CBOT. Buyers remain keen to engage with growers and lock in commitments early. End users are keen to get their cover in the north and the shipping stems are busy in the south given attractive export values still exist. If growers continue to spread their sales over the harvest period and beyond avoiding all coming to the table at once, then solid price indications exist to support Australian cash values.
• Northern Australia has its attention focused on the weather forecasts this week as traditional sorghum growing regions continue to miss needed rains for planting. Another dry year in QLD and northern NSW has seen further pressure on feedstocks and end users are relying on a solid sorghum crop to relieve the tight stock situation. The dry period continues to put pressure on feed prices in the northern states but expect this to ease slightly if a solid rain allows the sorghum crop to go in.
• The spread between malt and feed barley continues to grow. Weakness in international feed values continues on the back of falling corn futures and malt barley is in demand from end users as they look to lock away early sales. Feed barley represents prominent buying opportunities for end users at the moment compared to wheat. Positive price prospects for the feed values are hard to find and feeders are lapping up current prices in their feed rations. There is risk that the spread between wheat and barley will narrow but current indications imply wheat could come down relative to barley rather than the other way round.

National Summary – Hay:

• As the hay season comes to an end in Western Australia and Mid North SA the market is starting to settle, however in the eastern states the hay market is best described as variable.
• There has finally been some relief for growers in Northern NSW and parts of South East QLD following decent rainfalls, however most of Western and Southern QLD remain dry and demand for all fodder types is steady.
• There is limited cereal hay available in Northern NSW and QLD and with the help of freight subsidies some hay is moving north from Southern NSW. Prices remain firm but may ease in the coming weeks if more hay comes onto the market.
• Bulk lucerne hay production is underway in Northern and Central West NSW and is mainly being shipped into Queensland to meet strong demand. Lucerne producers in NSW however are facing a range of challenges with unusually cool nights slowing growth, increasing water costs and aphids causing extensive damage in some areas. Overall it is likely that the supply of Lucerne in 2014 will be tight.
• There are reports of increased straw production in southern QLD this year and without rain the quality is very good. Feedlots and drought affected station owners are active buyers.
• In the Southern market prices continue to fluctuate largely driven by the variable quality of hay available. There are reports of very low on farm prices being offered, however growers with storage capacity are opting to sit on their hay for now, rather than taking the discounted prices presently on offer.
• Buyers are advised to be wary of ‘bargains’ particularly when purchasing cereal and vetch hay this year. With reports of low grade weather damaged hay and some hay being baled before it is properly cured by inexperienced growers, AFIA advises anyone purchasing hay to get a feed test, use a trusted supplier or to inspect hay themselves prior to purchase to ensure they know what they are getting.
• New season Lucerne hay from northern Victoria is becoming available in limited quantities and there is steady demand. However growers are facing challenges, similar to those reported in NSW, and this could lead to firmer prices for later cuts of Lucerne hay. It’s also worth noting that Lucerne production is low at present.
• In southern dairy regions, including South East South Australia and Tasmania solid rains in the past few weeks have shortened the window for fodder conservation. Silage production will be down in these regions and there is likely to be increased haylage and hay production later in the year.
• Fodder analysis results to date are showing high levels of variability in the quality of hay, in particular NDF’s are coming in high and ME lower than expected due to big yielding crops. As usual we recommend buyers get a feed analysis before making any hay purchases.

This report has been commissioned by Dairy Australia to provide an independent and timely assessment of grain and hay markets in each dairying region. It should be remembered that actual prices may vary for quality or other reasons. All prices are quoted are exclusive of GST.

The information in this report is collected and disseminated with due care and attention to its accuracy, but Dairy Australia accepts no liability if, for any reason, the information is inaccurate, incomplete or out of date.

• Mareeba November rainfall: 6mm (Ave: 48mm).
• YTD: 750mm (Ave: 807). This time last year the tablelands had received 840mm.
• Most areas receiving 10-30mm which was well needed for summer sorghum sowing programs.
• Wheat: $ +5 ($364 to $374). It is currently cheaper than corn than is trucked up from central Queensland.
• Barley: $ +0 ($410 to $420). Not in contention with so little sown throughout CQ in the last two seasons. At this price it is not considered for ration mix at all.
• Corn prices $ +20 ($438 to $448). Corn prices have surged strongly on the back of perceived shortage of stored grain.
• Sorghum: $ +4 ($317 to $327). Sorghum trucked up from the tablelands appears to be the most suitable grain for pre Christmas cow feeding. Appearing the most suitable on current availability and price.
• The main concern at the moment is the tight supply of stored corn anywhere from here down to Dubbo. Much of the corn is already committed with little left for domestic trade.

• Demand remains strong for hay, with the cattle stations in drought affected Western Queensland the most active buyers.
• Despite some baling continuing the supply of hay is very low. This is the result of the dry conditions in Western Queensland putting extra pressure on the hay market for most of this year.
• Prices remain firm but steady this week.

• Toowoomba November Rainfall: 34mm (Ave: 83mm).
• YTD: 994mm (Ave: 647mm), compared to 596mm last year.
• Coastal wheat areas had more rain than inland centres this past week.
• Wheat: $ +0 ($314 to $324). Queensland wheat harvest was a modest one and didn’t take long to strip. It was finished before the rains of this week. All Queensland wheat including SEQ was of a milling quality.
• Stockfeed wheat supply contracts are being filled with APW and H2 what categories as well as HPHS (high protein high screenings wheat).
• Feed Barley: $ +0 ($309 to $319). Cheaper than wheat. But it is of more value to beef feedlots that desire white fat on carcasses. Something corn and sorghum does not deliver.
• Corn $ +12 ($367 to $377). Corn prices are up strongly. Based on perceived shortage of stored grain. If using corn hopefully it is fixed priced.
• Sorghum: $ +0 ($285 to $295). The main dairy grain for summer feeding based on price. Still old crop stocks in store. A small tonnage of January sorghum is expected.
• Sorghum is best feed grain to use for dairy cows to avoid competition from feedlots for barley, and exporters for wheat.
• Exporters will pack sorghum in containers but the business is very price sensitive and can be started and stopped very quickly. Consider pricing sorghum needs through to next May.

• There are small pockets through the Darling Downs that received good rainfalls in the past few weeks but most of Western and Southern QLD remain dry. Accordingly demand for all fodder types is steady.
• There is limited cereal hay available locally and with the help of freight subsidies some hay is moving north from Southern NSW. Prices remain firm but may ease in the coming weeks if more hay comes onto the market.
• Lucerne production in the Lockyer valley is well underway, supplying the hobby and horse buyers. Bulk Lucerne in Northern and Central West NSW is also underway mainly being shipped into Queensland to meet strong demand.
• Lucerne production in NSW is facing many challenges with unusually cool nights slowing growth, increasing water costs and aphids causing extensive damage in some areas. It is likely that the supply of Lucerne in 2014 will be tight.
• There are reports of increased straw production in southern QLD this year. Thanks to limited rain the quality is very good. Feedlots and drought affected station owners are active buyers.

• Lismore November rainfall total: 160mm (Ave: 98mm).
• YTD: 1248mm (Ave: 1101mm), compared to 1095mm this time last year.
• SFW Wheat: $ -9 ($363 to $373). Prices down as the harvest moves into top gear. Queues at many delivery depots.
• Some growers happy to sell ex paddock to avoid waiting at silos and to be given low quality assessments for faults such as high screenings
• Feed Barley: $ +5 ($361 to $371). At this stage feedlots are taking as much barley in, as they can accumulate. Prices may soften when and if they ease off in their accumulation over the harvest period.
• Corn $ +0 ($400 to $410). Corn prices ex Downs are holding prices in expectation of no weather-damaged wheat this harvest. If there is weather damaged wheat, feed corn prices must fall to make sales.
• Sorghum: $ +0 ($326 to $336). No price change this week. But stored sorghum still competitive in feed rations.
• These feed grain price ranges are based on Downs prices plus through road freight for delivery into NSW coastal areas.
• Better to make more permanent grain supply arrangements with local grain growers. Try to avoid the long grain haul costs, if at all possible.
• At the very least have silos capacity to take a full semi load of grain at the one time, thus avoiding the higher grain pricings that go with part grain load deliveries.
• Increasing productivity of sown pastures is important in increasing milk from cheap grass, than expensive grain.

• Despite some good rain falls in the past few weeks demand for hay from the dairy industry remains strong driven by limited pasture growth. This is expected to hold until summer pasture growth improves. Frosted cereal hay made through NSW is playing an important role in meeting the demand to this region presently.
• Hay prices are expected to ease in the coming weeks if there is follow up rain.
• The recent rain has improved grower confidence for summer cropping, with strong interest in maize, millet and sorghum for silage.
• There is limited Lucerne hay available and the price has increased considerably but reflects the big variation in quality available. Lucerne hay is now trading at $300-$500t delivered to Northern NSW.
• There is increased interest in straw production given the firm fodder market at present. New season straw is showing good quality and trading around $140-$150t delivered, beef producers are the most active buyers.

• Forbes November rainfall: 12mm (Ave: 50.1mm).
• YTD: 459mm (Ave: 437mm), compared to 543mm this time last year.
• SFW Wheat: $ -5 ($200 to $210). Wheat crops not quite coming up to grower yield expectations. Nevertheless holding human consumption classifications. Wheat prices have not yet settled for the harvest period, but reacting to a range of factors local and international as they occur.
• F1 Barley: $ +10 ($197 to $207). The barley price has worked its way up close to wheat and is probably not sustainable at this level. Early crops stripped have been wheat and canola. Barley bids are helped by all local wheat at this stage, being a human consumption category.
• Corn $ +10 ($385 to $395). Up strongly as supplies of old crop commodity seem to have run out, except for some Riverina tonnage that may not be committed
• Sorghum $ +17 ($323 to $333). Sorghum values based or northern sorghum trucked south. Conditions within the sorghum areas of NSW and Queensland have not been favourable to sowing the summer crop. Northern rains have helped sown crops but not encouraged more seeding
• Opportunity to get more milk from this source by easing back on grain usage in the bails. Nevertheless this cow feed is based on buying water, hence is more expensive than winter-grown pasture feed. Grain harvest progressing well, but still scope for rain to damage unstripped wheat crops and reduce the price for stockfeed wheat. This would also bring barley and triticale prices lower. So at his stage probably best to hold off pricing feed grain requirements through 2014.
• There will be plenty of grain for domestic use for all of NSW through 2014, but export tonnages are expected to be lower, especially for northern areas.

• Growers have had time to consider their options for frost affected cereal crops and it appears that the amount to be cut for hay is down on initial forecasts. With steady demand continuing from Northern NSW and QLD, hay from frosted crops will contribute toward replenishing fodder supplies for 2014.
• High grade cereal hay is difficult to source and is sought after by the chaff mills and horse market.
• Lucerne hay production is underway and demand for new season hay is steady. Increases in water prices may see the later cuts of Lucerne hay become more expensive.
• Prices remain firm but steady this week.

• Bega November rainfall total: 160mm (Ave: 63mm).
• YTD: 646mm (Ave: 585mm), compared to 819mm this time last year.
• SFW Wheat $ +20 ($255 to $265). At harvest trucks want to carry grain from farm to closest silo, or grain from farm to southern port for quick turn around. Wheat quality so far from all source areas is still of human consumption quality.
• Feed barley $ +5 ($222 to $232). Discount to wheat is following Victorian feed grains market more than comparative pricing from more northern potential source area such as Temora.
• Triticale $ +0 ($226 to $236). No interest in triticale at this early stage of the current harvest. It will come into consideration by late December.
• Oats: $ +0 ($208 to $218). Monaro graziers looking for cheap old season or season’s oats bought out of paddocks, for long term holding for sheep feed.
• Long way to go yet so plenty of opportunities for prudent grain purchases to come. Current grain harvesting weather is good with growers more concerned with delivering canola and wheat than barley.
• Frost affected wheat has not been stripped yet, it is expected to be priced around ASW prices because its protein level will have value for some buyers.

• The season has been fairly dry and there is steady demand for hay at present, with particular interest in cereal hay.
• Frosted cereals being baled in Southern NSW are creating an opportunity for buyers to replenish their supplies.
• New season cereal hay appears to be of reasonable quality but feed tests are showing some variable results. Buyers are well advised to ensure they inspect hay and get feed tests before making any purchases.
• Silage yields have been down this year, largely driven by the patchy seasonal conditions. This is likely to increase demand for cereal hay in 2014.
• Lucerne hay prices remain firm but steady this week. With supplies expected to remain tight due to low yields and high water costs the market is not likely to soften in the short term.
• There is some pea hay available which may be a good and slightly cheaper alternative to Lucerne.

• Tatura November Rainfall total: 21mm (Avg: 41mm)
• YTD: 329mm (Ave: 454mm), compared to 481mm this time last year.
• Wheat: $ +7 ($252 to $262). Canola is the first crop growers want to get stripped and delivered. Wheat yields are lower than growers were hoping for, but are still good considering the small amount of rain received on crops since sowing.
• F1 Barley: $ +7 ($201 to $211). Growers are going to leave barley till later in their stripping agenda.
• They have less to lose compared to canola and wheat.
• Triticale: $ +0 ($243 to $253), Triticale in t northeast won’t be stripped till late December. Its pricing then will depend on presence or absence of weather damaged wheat
• Feed Oats: $ +10 ($180 to $190). Milling and racehorse oat prices are up, taking fee oat prices with them. Demand from poultry industry for new crop.
• East of Echuca the grain harvest is slowly starting and won’t get into full gear till December.
• If you want grain out of paddocks, to save a storage cost for someone and hopefully for you to share in this, think north and west for Nov delivery.
• As of yet, no faulty grain is affecting Nth Vic grain markets, frosted wheat however, is going to come in soon and this may cause a drop in feed wheat prices, it may have an appeal for dairy use.
• Poultry and pig producers may see value.

• With the hay season well underway feed tests are indicating that there is a big variation in the quality of hay this year. In particular sourcing high grade cereal hay may be difficult.
• Cereal hay prices remain steady this week now trading at $140-$180t delivered to the GV. Buyers picking up hay that seems very cheap are encouraged to inspect hay and get a feed test as there are many report of poorly made, low quality hay this year with many inexperienced hay growers entering the market this year.
• There is a lot of interest in summer crops; maize, sorghum and millet for silage early next year. This is driven by good water allocations.
• Bulk Lucerne remains steady, around $220-$260 delivered, however there is some speculation prices could increase due to higher water prices and low supply. Vetch is trading at a similar price but quality is variable.

• Sale November rainfall: 23mm (Ave: 64mm).
• YTD: 519mm (Ave: 544mm), compared to 579mm this time last year.
• SFW Wheat: $ +7 ($306 to $316) Local wheat crops some time yet before they are ready for stripping. New season wheat becoming available from northern Wimmera this week, but in practice is still coming south out old old crop bunkers. OK if pried earlier at lower levels, but if buying fresh, barley is cheaper by a big margin.
• Barley: $ +7 ($251 to $261). Discount of barley to wheat is considerable, and favours its use for cow feed till Christmas. Beyond then best to await developments especially how wheat quality holds up over the December and January period within this region.
• Triticale: $ +0 ($288 to $298). Triticale in the northeast won’t be stripped till late December. Mallee and Wimmera crops earlier. Its pricing then will depend on presence or absence of weather damaged wheat Old crop supplies fully committed
• Feed Oats: $ +10 ($208 to $218). Local oats not yet been stripped, oaten hay crops have been down for extended periods. Some grazier buying of old season oats for later sheep use.
• Canola crops now windrowed and oiling up before headers go in. At this stage, grain requirements before Christmas will probably be met by prompt barley purchases.
• Barley is cheaper and with warmer weather coming energy for cows is not quite as critical. Silage making happening.
• Cereal hay and almonds hulls still running into central black soil dairy farms. This is expensive, but necessary, in view of lost pasture in drought of last summer and autumn and no chance to resow since, due to wet clays.

• Despite patchy weather conditions slowing the silage season across Gippsland, production is now well underway and there are reports of good quality and yields.
• The hay harvest should commence in the coming weeks and looks promising. With plenty of moisture in the ground good growth is expected as the temperatures warm up.
• Trading is generally slow as local buyers concentrate on their own fodder conservation program.
• New season cereal hay prices are fluctuating as demand is slow. There looks like being good reserves of lower grade cereal hay in 2014 however high grade hay may be difficult to source.
• New season cereal and vetch hay is of variable quality and buyers are well advised to use their trusted hay supplier and ensure they inspect hay and get a feed test before purchasing any hay this year.

• Port Fairy November rainfall: 47.8 (Ave: 48.2mm).
• YTD: 900mm (Ave: 666.5mm), compared to 697mm this time last year.
• Minimal rain this week with most regions receiving less than 5mm.
• SFW1 Wheat: $ +7 ($255 to $265). Local wheat crops are still some time before they are stripped. Northern Wimmera will begin to harvest wheat this week.
• Feed Barley: $ +7 ($207 to $217). Discount to wheat is still considerable and favours its use for cow feed until Christmas.
• Triticale prices $ +0 ($245 to $255). Mallee triticale could be stripped any time mid November.
• Feed oats $ +10 ($188 to $198). Many graziers are interested in old season oats for purchase as drought protection if they are cheap enough. Some graziers are beginning to buy oats for alter sheep use.
• Barely remains much cheaper and the commodity of choice as energy for cows is not quite as critical with the warmer weather in the coming months.
• Lots of hay is still down and curing at the moment.

• Trading has slowed as local buyers are concentrating on conserving their own hay and silage at present. The season is later this year due to heavy grazing pressure in winter, cooler temperatures in spring slowing growth and the patchy weather conditions interfering with baling. For some the quality of silage has been impacted due to the late season.
• Low grade cereal hay is trading as low as $120/t on farm (ex Wimmera/Mallee) however anyone thinking they are getting a bargain is well advised to inspect hay and get a feed test prior to purchase to ensure they understand what they are getting, as there is a lot of variable quality hay on the market this season.
• There are also reports of unusually high NDF’s and ADF’s in cereal hay this year which may impact on digestibility. A feed test prior to purchase will help buyers identify NDF’s and ADF’s.
• Higher grade cereal hay is trading for around $200t delivered to South West Victoria.
• There is speculation that new season pasture hay prices will start at $140-150t delivered better quality clover hay being baled in the Horsham region should come on the market at about $220-240/t delivered.

• Mount Gambier November rainfall: 33.6mm (Ave: 46.8mm).
• YTD: 764.2mm (Ave: 671mm), compared to 623mm this time last year.
• Wheat $ +5 ($261 to $271) Wheat taken out of South Australia should be $20 a tonne cheaper at grain collection point than wheat taken out of the western Wimmera as pickup point.
• Feed barley $ +5 ($236 to $246). Barley is being received in strong volume at southeast depots. This pricing represents SA prices at this point in time.
• Triticale $ +0 ($230 to $240). It is in extremely short supply and very little to no trade occurring. Still too early for the harvest period which isn’t expected to start until Early December.
• Oat prices $ +10 ($180 to $190) Minimal oats have come off thus far but what has looks to be of a high quality.
• South East region has already taken 108,00 tonnes of grain to last Sunday.

• Patchy weather conditions have slowed fodder production in South East South Australia and reduced the quality of some silage and hay. With the weather becoming finer over the past week baling has recommenced.
• With large areas set aside for hay production this year and the added pressure of unfavourable weather conditions there is extra pressure on contractors and growers. Some rushed jobs have led to reports of compromised hay quality (eg. hay being baled too green) which can pose a big risk when the hay is stored or transported. Buyers are encouraged to inspect any hay they purchase and to get a feed test before buying any new season hay.
• Growers and contractors looking for advice on curing hay can visit the AFIA website, click here for more information.
• The supply of lucerne hay is low and the market for lucerne seed remains firm which may influence growers to favour seed production over hay for a more stable return. The result will mean a continuing tight market for protein hay in 2014.
• Prices are speculative for new season hay, there has been a slight increase in cereal hay price this week but all other varieties remain unchanged as there is limited trading.

• Murray Bridge November rainfall: 2.8mm (Ave: 25.3mm).
• YTD: 319mm (Ave: 321mm). 407mm this time last year.
• Wheat $ +4 ($236 to $246). Currently a line ball between wheat and barley usage on price.
• Feed barley $ +1 ($212 to $222). Price relativity to wheat is back to traditional levels. Most wheat currently delivered seems to be of human consumption grades.
• Triticale $ +5 ($255 to $265). Still too early for triticale to come into buying mix just yet.
• Feed oats $ +5 ($178 to $188). Seems the early oats that have come off are off export quality.
• At this stage all the wheat that has been received is of good quality, that is suited for human consumption, even through some of it high screenings wheat with elevated grain protein.
• Suggest just buy for short term needs at present prices, and wait before locking in larger tonnages at fixed prices for delivery through 2014.

• Baling cereal hay is almost completed for 2014 and despite frustrations with the weather growers are reporting good colour and variable quality in their cereal hay. Yields are above average.
• Despite a lack of carry-over from 2012/2013 the big yielding 2013 cereal hay harvest looks set to replenish empty stores locally.
• Supply of protein (medic and vetch) hay is less consistent after weather events at baling caused a lot of trouble for growers, resulting in reduced yields and quality.
• There appears to be interest in cutting straw this year which will commence in the coming weeks. If the quality is good demand will be steady from the domestic and export markets.
• Prices remain steady this week.

• Bunbury November rainfall: 0mm (Ave: 26.7mm).
• YTD 798mm (Ave: 712mm), compared to 619.6mm this time last year.
• No rain this week as harvest begins to commence.
• Wheat: $ +30 ($310 to $320). Growers ignoring domestic markets and delivering to local depots has pushed up the price within the region.
• Feed barley $ +5 ($270 to $280). The barely spread to wheat has not changed in the last two weeks. Plenty of quantity available meaning there is little need to secure stocks for the season this early.
• Triticale $ +0 ($270 to $280). Very little trade occurring as the commodity is becoming increasingly harder to source.
• Oats +0 ($200 to $210). New season grain is almost coming in now with the oats looking favourable.
• Looks to be good cow grazing in the region as the paddocks begin to dry off.

• The baling season is drawing to a close in WA and average or better yields have been reported this season.
• Quality is varied this year, a result of high yields and unfavourable weather conditions.
• Hay trading on the domestic market is slow and fodder prices are still speculative but unchanged this week.

• Smithton November rainfall: 118mm (Ave: 56.9mm).
• YTD: 1027mm (Ave: 834mm), compared to 835.8mm this time last year.
• Showers throughout the region with areas receiving anywhere between 6-14mm.
• Wheat $+5 ($330 to $340). If seeking wheat try and secure it roughly $25-30 above the local imported barley price.
• Feed barley $ +5 ($295 to $305). Huge discount to wheat on the mainland makes it an attractive buy.
• Triticale prices $ +0 ($333 to $343). Very little demand and mainland harvest will not commence until mid December. It’s pricing and demand will depend on presence of weather-damaged wheat from the mainland.
• Oats prices $ +10 ($263 to $273). Not relevant for dairy rotations at this point in time.
• Gap between wheat and F1 barley seems high, and may narrow as the mainland grain harvest gathers more pace.
• Quality summer grazing from irrigation can be relied on.
• Good conditions for pasture growth and utilization.

• Demand for fodder remains steady and supply is low. Buyers are actively making enquiries now to secure fodder when it becomes available. There is particular interest in securing barley and ryegrass straw.
• Silage production in particular is being hampered by continued rainfall events. This may see growers looking to make more hay.
• Early projections are that supply will be low again in 2014 with demand for fodder from the dairy and beef sectors set to remain steady and unfavourable weather conditions shortening the window for fodder production.
• Prices are speculative and due to limited trading remain unchanged this week.