Grain – Hay Report – 17 January 2014

International & National Summary – Grain:

• The swathe of USDA reports released last week had a bearish influence on global wheat markets. CBOT March futures ended the week down A$15.55/t to close on Monday night at A$232.68/t. The USDA’s monthly World Agricultural Supply and Demand Report saw global ending stocks increase by 2.62Mt on the back of a further rise in production and decrease to total use.
• The change in global ending stocks is being driven by the heavy discount of corn relative to wheat, favouring coarse grain in feed rations and moving feed use away from wheat.. Market attention will now switch focus to the new season.
• US winter wheat is an important factor for Australian growers to consider. The cold conditions are causing concern with the possibility of winterkill where snow cover is insufficient. USDA revealed winter wheat plantings are down 3% year on year; however firm yields could see a larger winter wheat crop in the coming year.
• Chicago wheat values continue to spiral down while in contrast Australian grain values continue to hold their value. CBOT wheat fell A$16/t over the last week, however WA and SA managed to fall only $4 and $7 respectively. One of the reasons Australian values are performing so well relative to international futures is the busy shipping stem booked out of the southern export oriented states. Merchants are posting aggressive bids to fulfil their commitments. When existing commitments are covered it is likely CBOT wheat will become more influential to Aussie values.
• In Northern Australia the continued dry conditions and a severe shortage of feed grain paints a vastly different picture. Grain is required to be priced at historically high levels to not only prevent grain from being exported but also high enough to attract grain from southern markets. End users are required to pay premiums to public bids in order to fill required orders. There is a price cap for these prices as it soon becomes affordable to execute from other domestic markets including SA. If end users have not already locked in contracts for later delivery in the northern states it is inevitable that they will have to offer price premiums to secure supply. It is expected feed prices will hold well into the year until there is sufficient certainty for solid production.
• Feed barley prices in southern export oriented states including WA, SA and VIC have continued to improve throughout the week narrowing the gap to wheat. The USDA report effectively implied corn had been to cheap relative to wheat, which is supportive to feed barely prices. In combination with these international factors the drought stricken northern states are pushing Australian feed values higher. Given the abundance of feed barley in southern states it is not anticipated this will continue extensively. An increase of $15-20/t over the last two weeks will see many growers come to the table providing an opportunity to purchase required grain for later delivery. Previously growers were hesitant to offload any feed grain in the belief of a potential price rise.
• Opportunities still exist for end users to purchase quality-affected grain. Frost was evident right down the eastern seaboard from central NSW, through to the north west of Victoria and also elements of SA. The late break to season also saw much of the barley contaminated with wheat throughout northern Victoria. ‘Wharley’ has been trading at a discount to feed prices providing end users with potentially higher protein levels. With majority of purchases executed ex-farm it is imperative to undertake the appropriate quality checks and proper due diligence.

National Summary – Hay:

• With the New Year now upon us trade is starting to pick up slightly as buyers look to secure their fodder supplies for 2014. With many regions drying off quickly and grain prices on the rise, we may see increases in activity over the coming weeks. This could impact price, particularly for lucerne and vetch hay.
• Over the past few months we have continually suggested buyers get a feed analysis done, inspect hay or use a trusted supplier for their hay purchases. Despite this we continue to hear reports of buyers chasing cheap hay and not getting it tested. For buyers seeking more than just roughage to feed drought affected cattle, we strongly encourage feed analysis or hay inspection before you make any hay purchase this season.

Northern Australia:

• Atherton Tablelands and South East Queensland are still reporting steady demand for hay. Demand is from cattle stations in drought affected Western Queensland.
• Fodder supplies are low in these regions, although there are some small quantities of lucerne available at a very high cost.
• Buyers are now looking for cheaper feed sources such as sorghum stubble to meet demand.
• There is still a steady market for cereal hay and straw from Southern NSW into northern regions. This will impact supply and possibly prices over the coming months for buyers in the southern regions.
• Northern NSW has had some summer storms boosting pasture growth and helping to increase pasture hay yields. While some quantities of pasture hay are becoming available and the quality is good, feed value is low.

Southern Australia:

• Most regions are drying off quickly, affecting summer crop growth and may be contributing to the slight increase in demand for hay this week.
• The last few weeks have seen increased interest lucerne hay and prices have lifted slightly in some areas. There is some buyer resistance for lucerne hay in Victoria upwards of $230-$240 on farm.
• At this stage many growers in Victoria and South Australia are opting to store their hay until later in the year and considering their own hay requirements before looking at their marketing options.
• There are large quantities of pasture hay available resulting from the big yielding pasture hay season. Prices have eased this week as a result of this good supply.
• There is some interest in straw production driven by dairy farmers, who are making round bale straw straight behind the header. This trend is being noted through the Goulburn Valley.

Western Australia:

• Hay trading is fairly slow on the domestic market although there is a small amount of interest in cereal hay.
• Straw production is coming to an end with good yield and quality being reported.

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 January rainfall: 7mm (Ave: 243mm).
• YTD: 7mm (Ave: 243). This time last year the tablelands had received 13mm.
• Small amount of rainfall, useful but nowhere near enough to change anything growth wise.
• Wheat: $ +6 ($383 to $393). Wheats of all qualities trading at equal prices. Prices are driven by domestic influences and feed grain users.
• Barley: $ +3 ($453 to $463). Barley being sourced from Downs, as far south as Wagga due to low South Queensland supply. Too expensive for any class of animal this far north. No change expected till September 2014.
• Corn: prices $ -38 ($340 to $350). New crop OK quality where it’s had an irrigation program since sowing.
• Sorghum: $ +0 ($336 to $346). Varied rainfall encouraging for sorghum plant late Jan or early February, more needed.

• Demand remains firm from cattle stations in drought affected Western Queensland.
• Hay supplies are low and look set to remain tight over the coming months.
• Summer crops have been planted following rain in early December. Decent follow up rain is now sought after to keep these crops going.
• Prices remain firm but steady this week.

• Toowoomba January Rainfall: 3mm (Ave: 109mm).
• YTD: 3mm (Ave: 109mm), compared to 68mm last year.
• Not enough to boost stored soil moisture.
• Wheat: $ +6 ($350 to $360). All wheat trading at equal prices. Domestic buyers are outbidding potential exporters as drought buying takes place.
• Feed Barley: $ +3 ($351 to $361). Feedlots paying more as they hold stock in feedlots till the wet comes and they can be grazed.
• Corn: $ +20 ($427 to $437). Only supplies seem to be Atherton corn now being stripped. Quality brilliant.
• Sorghum: $ +0 ($316 to $326). Now deemed to late to seed sorghum. Irrigated crops to be stripped before the end of the month.

• Hay supplies are low for all varieties in South East Queensland.
• Demand remains steady and cash strapped buyers are trying to source lower grade, lower cost hay where possible. There are reports this year of sorghum stubble being baled for roughage.
• There is limited cereal hay available locally and with the help of freight subsidies hay continues to move north from Southern NSW.
• Bulk lucerne hay is in short supply throughout the Darling Downs and in key supply regions such as Northern NSW and Central West NSW.
• Lucerne from the Lockyer Valley is available in some very small quantities and the quality is high.
• Straw supplies are very tight locally.
• Prices remain unchanged this week.

• Lismore January rainfall total: 24mm (Ave: 172mm).
• YTD: 24mm (Ave: 172mm), compared to 13mm this time last year.
• Rain is encouraging, if more before end of January would be worth sowing sorghum/millet/corn for feed or sale.
• SFW Wheat: $ +6 ($384 to $394). As applies to all QLD, and SNSW domestic buyers are outbidding potential exporters as drought buying takes place.
• Feed Barley: $ +3 ($374 to $384). Feedlots still buying barley, but hopefully prices will come back when a general summer rain goes through grain areas.
• Corn $ +15 ($432 to $442). Strong prices caused up shortage of old crop, hence some growers may choose to take new crop beyond silage making and allow cobs to ripen for stripping.
• Sorghum: $ +0 ($333 to $343). Not enough rain in eastern downs to boost stored soil, hence now deemed to late to seed sorghum on the down. Its vital coastal sorghum crops are monitored.
• Feed grades going to be in short supply for QLD and NNSW.

• Demand for hay is steady but has eased over the past month. Patchy summer rain in December benefitted pasture growth, following a dry winter and spring. Growers are now looking for good follow up rain as conditions are drying off quickly. The strongest demand for hay is from outside the region in Southern Queensland.
• Local cereal hay supplies are low due to steady demand through spring and early summer last year.
• Lucerne hay production is underway and quality is good thanks to favourable baling conditions. Supplies are low, due to steady demand from other regions. Price increased slightly this week up $25 to $300-$350t delivered locally.
• Following strong demand in the past few months straw supplies are low.
• Pasture hay production is underway with good quality reported although feed value is low.

• Forbes January rainfall: 47mm (Ave: 24mm).
• YTD: 47mm (Ave: 24mm), compared to 0mm this time last year.
• No use where rain fell on stubbles or dry standing feed
• SFW Wheat: $ +5 ($240 to $250). Wheat quality from recent crop is excellent, but no margins for quality now. All trading at the one price for stockfeed. This market is higher than export based prices.
• F1 Barley: $ +5 ($226 to $236). Barley keenly sought by buyers for northern use in NSW and QLD and demand is stretching this far south.
• Corn $ +15 ($425 to $435). Very low supplies of corn from old crop and new season feed. Supplies from other regions should emerge about March, but not before.
• Sorghum $ +13 ($346 to $356). No prospects even for late seeding sorghum, prices have firmed. This price range includes freight down from Gunnedah or other production areas.
• Drought in more northern areas is elevating grain prices within the central west.
• There is enough wheat or barley locally for dairy farmers to choose from.

• Demand has continued to increase over the past month with hot dry conditions limiting paddock feed. Livestock and dairy farmers sourcing additional feed are the most active buyers.
• Cereal hay is in low supply due to the steady demand from drought affected Western Queensland. Many of these buyers are now looking to Southern NSW to meet demand.
• Lucerne supplies remain low as most new season hay, both first and second cut was already sold on forward contacts. Third cut lucerne is coming onto the market and is moving quickly.
• Buyers seeking lucerne hay for later in the year are well advised to source their hay as soon as possible. Supplies will be tight for all protein hay (vetch and lucerne) in 2014.
• Demand for straw has picked up in over the past few weeks but prices remain steady at present.
• Prices remain firm but steady this week.

• Bega January rainfall total: 2mm (Ave: 53mm).
• YTD: 2mm (Ave: 53mm), compared to 8mm this time last year.
• No rain in Bega valley this week
• SFW Wheat $ +2 ($258 to $268). Export demand has slowed. Domestic buyers are outbidding exporters. One price to domestic users for all qualities now.
• Feed barley $ +4 ($248 to $258). Up more strongly than wheat due to demand in northern drought areas.
• Triticale $ +10 ($256 to $266). All three winter grains are trading very close to each other. Distorted by drought demand.
• Oats: $ +3 ($226 to $236). Limited trading for use on south coast farms. More interest for oats to go north to summer cropping and grazing areas.
• Hill conditions still green from December rains but will brown off from a dry January and now warmer conditions

• Despite good early summer rain the season is drying off quickly. Demand for hay is slow but will pick up in the coming weeks if there are no decent rains.
• After early interest in buying cereal hay behind the baler trading has now eased but prices remain steady. Strong demand for cereal hay from Queensland will impact the supply available from southern NSW later in the season. Buyers may be forced to source hay from further afield later this year.
• Supplies of lucerne hay are low in most parts of eastern Australia, particularly in the dry land production areas. Supplies are likely to remain tight this year due to steady demand since new season hay came onto the market a few months ago. Buyers seeking protein hay such as lucerne are encouraged to lock in their 2014 requirements now.
• Straw is available and trading is slow at present.
• Prices remain steady this week due to slow trading.

• Tatura January Rainfall total: 0.2mm (Avg: 34mm)
• YTD: 0.2 mm (Ave: 34mm), compared to 0 mm this time last year.
• No rain this past week.
• Wheat: $ +2 ($257 to $267). Prices up slightly this week. Harvest mainly for red wheats continues in Western Districts. Wheat in warehouse or on-farm unlikely to be sold till winter, unless they have cash flow requirements.
• F1 Barley: $ +10 ($221 to $231). Markets are firm up the east coast on buying, as Nth NSW and QLD go deeper into drought. Export price bids higher for SA and WA feed barley for bulk export. Discount to wheat is wider than normal.
• Triticale: $ +0 ($253 to $263). All has been stripped in northeast. Most held on farm in growers’ silos where it will remain till winter demand picks up.
• Feed Oats: $ +3 ($188 to $198). Some interest from Strathbogie horse establishments. Most want quality oat weighing more than basic feed oat.
• Grain demand has eased due to quality pastures
• Drought conditions for summer crops and pastures north of Gunnedah is driving east coat feed barley prices higher

• With conditions drying off demand for hay is steady. There is particular interest in lucerne hay at present.
• There are good supplies of new season cereal hay locally however professional hay growers are filling empty haysheds and considering their own hay requirements before looking at marketing options.
• Feed analysis results are showing some variation in the quality of hay this year, particularly for cereal hay and vetch. Sourcing high grade cereal hay may be difficult and getting a feed analysis done before making any hay purchases is strongly encouraged.
• Increased demand for lucerne over the past few weeks will put pressure on supplies for later in the year. Despite a spike in demand many growers are opting to hold onto their protein hay for now, until demand picks up in the coming months.
• Buyers who require protein hay (lucerne and vetch) are encouraged to lock in their supply early to avoid high spot market prices or missing out later in 2014.
• Straw production is underway and this year has seen an increasing trend toward baling (round bales) behind the harvester. Stocks of straw are likely to be good this year, after being cleaned out in 2013.
• Despite a slight increase in trading, prices remain unchanged this week.

• Sale January rainfall: 2mm (Ave: 45mm).
• YTD: 2mm (Ave: 45mm), compared to 0mm this time last year.
• No rain in South, East or West Gippsland this week
• SFW Wheat: $ +2 ($309 to $319) Slight recovery from drop over the Christmas period. Margin of wheat over barley is high by historical measures.
• Barley: $ +3 ($270 to $280). Prices rising for two reasons. High demand in Nth NSW and QLD due to drought but no feed around, green or dry. Exporters seeking barley for shipment out of SA and WA, and to lesser extent VIC.
• Triticale: $ +0 ($295 to $305). All Nth East triticale has been stripped. Will be held in warehouse or on-farm until winter dairy grain demand picks up.
• Feed Oats: $ +2 ($218 to $228). Most interest is for better filled oats of a category better than feed.

• Demand has started to pick up this week with particular interest in lucerne and vetch hay, sourced from Northern and Western Victoria.
• There has been a lot of interest in pasture hay production this season due to the lack of carry over hay from 2013. After a slow start to the hay season the hay harvest is now coming to an end; yields have been good but quality is variable.
• New season cereal and vetch hay is available but there are reports of variable quality. Buyers are well advised to use a trusted hay supplier, ensure they have their hay inspected and get a feed analysis before purchasing any hay this year.
• Prices remain steady this week due to slow trading.

• Port Fairy January rainfall: 18 mm (Ave: 34mm).
• YTD: 18mm (Ave: 34mm), compared to 3mm this time last year.
• No rain this week at all in any areas of South West VIC
• SFW1 Wheat: $ +0 ($253 to $263). Many Western District crops to be stripped. Getting grain moisture down has been a problem. Not so during heat wave this week. Headers have had to stop on days of extreme fire danger. Some buying off farm is still on.
• Feed Barley: $ +3 ($225 to $235). Discount to stockfeed wheat is narrowing. Still at historically high discount. Region out of grasp of pull of grain to northern drought feeders.
• Triticale prices $ +0 ($250 to $260). Prices very close to wheat. Drier conditions may bring demand for more protein in wheat.
• Feed oats $ +3 ($199 to $209). Still some local crops to come off. Western District crop is brighter than normal. Better eye appeal to grazier buyers for reserve drought feed for sheep.
• Some pastures are drying off due to high temperatures.
• Local crops still being stripped but not on days of extreme fire danger. Red winter wheat varieties last to come off.

• There has been an increase in demand for protein (vetch and lucerne) hay and some interest in cereal hay over the past few weeks, as growers try to secure their supplies for the year ahead.
• Cereal hay prices firmed about $25 this week to $180-$220/t delivered. Buyers are securing better quality hay now to avoid missing out later in the year.
• Lucerne hay prices firmed slightly this week up $5 to $240-$260 delivered.
• Supplies of protein hay, in particular lucerne look set to be tight this year. All buyers are encouraged to secure their 2014 lucerne hay requirements now to avoid expected high spot market prices later in the year.
• After a fairly patchy start to the pasture hay season the harvest is now coming to an end. Big hay yields have been reported and pasture hay supplies are good.
• With new season hay now readily available pasture hay prices eased this week trading at $140-$180/t delivered.
• After a hot dry spell this week straw is likely to commence in the next few weeks.

• Mount Gambier January rainfall: 25mm (Ave: 27mm).
• YTD: 25mm (Ave: 27mm), compared to 0.8mm this time last year.
• Hot and dry through this region this week.
• Wheat $ +0 ($269 to $279) Prices steady this week. Most port bid prices down compared to previous week. May be trending lower. Local harvest all but finished in south east.
• Feed barley $ +3 ($243 to $253). Margin between wheat and barley is narrowing. But still at historically high discount.
• Triticale $ +0 ($250 to $260). At a discount to wheat. Similar energy tests as for most wheat samples.
• Oat prices $ +5 ($200 to $210) Not many oats in SA, east of Port Augusta. Better supplies in western VIC. Most interest coming from wool producers.
• Dryland feed has dried off from current heat. But has food energy at least until there is significant rain to leach some feed value out.

• The hay harvest is now drawing to a close with the exception of straw and irrigated lucerne which are still ongoing.
• Demand is slow at present as there is plenty of paddock feed available.
• New season cereal hay is available but the quality is variable. Prices have eased this week to $140-$160t delivered.
• Lucerne prices remain steady this week. Many growers are considering their own requirements before putting lucerne hay on the market at this stage.
• Pasture hay is readily available after a big yielding season. Quality is variable and prices are about $140-$160t delivered.
• Straw is about to commence and new season straw is predicted to start at around $100-$120/t delivered.

• Murray Bridge January rainfall: 7mm (Ave: 16mm).
• YTD: 7mm (Ave: 16mm). 10mm this time last year.
• Wheat $ -4 ($239 to $249). Trend to lower wheat prices from the Christmas break continues. With no weather-damaged wheat, sub standard grades from recent harvest have values for blending with other parcels.
• Feed barley $ +3 ($215 to $225). Prices driven by export bids. So wont see the price increases as in the eastern states where drought affected Nth NSW and QLD are seeking feed grain supplies from southern areas.
• Triticale $ +5 ($235 to $245). Low volumes put up for sale. Uncertainty of where triticale price is relative to wheat.
• Feed oats $ +0 ($178 to $188). Not many oats in SA, east of Port Augusta. Most interest coming from wool producers.

• Demand for hay on the domestic market is slow at present. The market doesn’t traditionally pick up until early autumn, so far 2014 looks to be no exception.
• Cereal hay supplies are good but quality is variable. Some frosted wheat is also available, which is generally of good quality.
• Supply of protein (medic and vetch) hay is low and may be difficult to source later in the year.
• Straw production is drawing to a close. The quality has been good but rain has caused issues in some areas.
• With trading slow prices remain steady this week.

• Bunbury January rainfall: 10mm (Ave: 22mm).
• YTD 10mm (Ave: 22mm), compared to 3mm this time last year.
• No rain this week anywhere near the Bunbury dairy areas. Hot and dry even by WA standards.
• Wheat: $ -7 ($302 to $312). Exporter bids lower in all areas of Australia, following the trend from overseas futures markets. Domestic markets in eastern states have risen above export values. Rumours of some SA or WA grain to be shipped around to Brisbane before next wheat harvest.
• Feed barley $ +7 ($274 to $284). Prices in WA are purely affected by export market. Not complicated by domestic demand increases like eastern states. Exporters concentrate on SA and WA as supply sources.
• Triticale $ +0 ($275 to $285). One major buyer is advertising a $255 delivered Perth price and has had the same price since late December. Sales continue to occur around this number with minimal potential for the price to change.
• Oats +0 ($180 to $190). Little demand for feed oats as plenty of other good sources of feed for sheep producers are available.
• Need to be very careful about threat of fire in tinder dry conditions away from the irrigation paddocks.

• Hay trading on the domestic market is slow at present, although there is some interest in cereal hay.
• Cereal hay supplies are good due to high yields in the 2013 season; however feed analysis results are showing some variations in quality.
• Lucerne hay is also sought after but supply is low.
• Pasture hay and silage production was down in 2013, after a wet start to spring resulted in a short baling window.
• Straw is now complete with production average or slightly down this season. Yields were good and so was the quality.
• This week prices remain steady and unchanged.

• Smithton January rainfall: 32mm (Ave: 42mm).
• YTD: 32mm (Ave: 42mm), compared to 10mm this time last year.
• No rain this week on either the main island or King Island.
• Wheat $ +0 ($330 to $340). Export bidding pretty flat. VIC wheat prices running higher than SA, due to stronger domestic markets in eastern states.
• Feed barley $ +0 ($310 to $320). Discount to wheat now back to traditional relativities.
• Triticale prices $ +0 ($315 to $325). Mainland harvest now finished, except for some coastal areas of SW VIC. Held in storage for winter marketing.
• Oats prices $ +2 ($273 to $283). Oats east of Adelaide in SA difficult to find.
• Summer crops are being irrigated
• Grain demand currently low due to quality of grass pastures

• The hay harvest is now coming to an end. It’s been a big season, with contractors struggling to keep up to demand.
• Demand for hay is fairly slow due to a reasonable amount of paddock feed. However there are still a steady market from customers chasing good quality lucerne and oaten hay.
• There were large amounts of oaten hay made this season but quality is variable.
• Lucerne supplies are low and demand is steady. Anyone seeking lucerne hay is advised to secure their requirements now for later in the year.
• The supply of pasture hay is good following a big yielding season, however quality is variable.
• New season pasture hay is coming onto the market at $150-$200t delivered.
• All other hay prices remain unchanged this week.