Grain – Hay Report – 23 January 2014

International & National Summary – Grain:

• The public holiday for US markets due to Martin Luther King Day meant it was a shortened trading week. Chicago March wheat futures ended the week down 10 USc/bu but was directly offset by the Australian dollar coming off. The US financial situation continues to improve which we expect will keep the Australian dollar flat to lower in the coming months. With the Australian dollar losing 2.56 USc over the last week Chicago futures increased A$3/t to close at A$235/t.
• General market sentiment is that there is further downside potential in international wheat values evidenced by the large speculative net short position in CBOT futures. Global production is almost all accounted for now as key regions have concluded their harvest. Market attention is now firmly focused on the 14/15 crop including the US winter wheat crop already planted.
• A number of key international transactions occurred throughout the week indicating active demand in global wheat markets. Jordan, Bangladesh and the Philippines all purchased parcels of wheat this week through tender. Key global buyer Egypt bought 295,000t of wheat of Black Sea origin. These transactions are supportive to Australian values with a healthy global appetite still evident.
• As has been the case since harvest commenced Australian grain values continue to hold relative to falling international values. A strong export program out of the southern states including South Australia and Western Australia coupled with the dry conditions in Northern Australia have resulted in feed values rising further this week.
• In the southern export oriented states feed prices have risen sharply this week as exporters look to execute sales to cover required tonnages. Geelong and Port Adelaide port zones prices have increased $13 for feed barley to close at $248 and $225 respectively. This rise, driven by execution into international markets is resulting in high levels of market activity as growers capture the recent price rise. With good quantities of grain available to purchase it may present an opportunity for end users to contract grain for later delivery.
• Grain prices in the northern states edged higher again this week with dry conditions continuing and grain being sourced from further south. There is however a cap on feed prices, as it will soon become affordable to source grain from export-oriented regions such as South Australia. Expect these inflated prices to continue well into the year until there is sufficient certainty for production.
• Reports indicate there remains a significant quantity of quality affected grain remaining in on-farm storage across the eastern seaboard. Continue to be vigilant for any remaining frost-affected grain from Southern NSW down to southern Victoria.

National Summary – Hay:

• Following a hot dry spell across Eastern Australia in the past week there have been a further increases in demand for protein hay.
• The increase in demand for protein hays seems to be impacting on other high protein stock feeds including canola and cotton seed meal. Price increases in both were observed this week with canola meal reported to be trading at $440t.
• Again this week we are hearing a clear message that protein hay supplies are likely to be tight in 2014. Any buyers seeking protein hay for later in the year are encouraged to source their requirements now to avoid paying high spot market prices later in the year.

Northern Australia:

• Atherton Tablelands and South East Queensland are still reporting steady demand for hay. Most of the demand is from cattle stations in drought affected Western Queensland and from feedlots.
• 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 and lucerne hay from Southern NSW and Victoria into northern regions. This will impact supply and possibly prices over the coming months for buyers in the southern regions.

Southern Australia:

• Most regions are drying off quickly, affecting summer crop growth and contributing to the slight increase in demand for hay this week.
• Despite increased interest in lucerne hay over the past few weeks there is still some buyer resistance for lucerne hay in Victoria and South East South Australia upwards of $220-$240t 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 may continue to ease in the coming weeks as a result of this good supply.

Western Australia:

• Hay trading is fairly slow on the domestic market although there is a small amount of interest in cereal hay.
• Lucerne hay is in short supply.
• Straw production is coming to an end with big yields and good 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: 0mm (Ave: 243mm).
• YTD: 0mm (Ave: 243). This time last year the tablelands had received 13mm.
• No rain yet this year and is exacerbated by heat.
• Wheat: $ +5 ($377 to $387). The wheat price isn’t increasing as much as other feed grains. This is due to Central Queensland wheat being human consumption quality and high protein.
• Barley: $ +23 ($450 to $460). Barley is being sourced from the Downs, as far south as Wagga due to low South Queensland supply. It is currently too expensive for any class of animal this far north.
• Corn prices $ +30 ($378 to $388). The corn harvest is now underway. Predominately going to gritting uses, which is supporting feed corn prices.
• Sorghum: $ +25 ($336 to $346). A lack of pre-planting rain has lowered prospects for timely sowing of the sorghum summer crop. Growers are desperately seeking soil moisture.

• 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.
• The summer forage crops planted following rain in early December now need decent follow up rain now to keep these crops going.
• Prices remain firm but steady this week.

• Toowoomba January Rainfall: 3mm (Ave: 109mm).
• YTD: 3mm (Ave: 109mm), compared to 0mm last year.
• Wheat: $ +5 ($344 to $3454). There has been a modest price rise compared to other feed grains.
• Feed Barley: $ +22 ($348 to $358). Feedlots are prepared to pay excess road transport costs, with trades occurring as far south as Wagga.
• Corn $ +30 ($407 to $417). Minimal old crop corn stocks remaining at the moment. New crop not yet available for feed use and is instead being bought for industrial use.
• Sorghum: $ +11 ($316 to $326). Opportunities for late sowing of sorghum are all but gone. Irrigated crops are to be stripped within two weeks.
• Dry, hot conditions reduced summer crop prospects.
• Unlikely to see any change in the trend of increasing grain prices over next three months.
• Feed grain prices and exporter bids for Australian grain will be influenced by Northern Hemisphere crops coming out of dormancy from under the snow.

• 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 and roughage where possible. There are reports of sorghum stubble being baled to meet this demand.
• There is strong demand for both cottonseed meal and canola meal from this region, which is playing a role in the recently noted price increases. Canola meal is trading at around $440t.
• There is limited cereal hay available locally and hay continues to move north from Southern NSW. Feedlots are the most active buyers.
• 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: 7mm (Ave: 172mm).
• YTD: 7mm (Ave: 172mm), compared to 2mm this time last year.
• SFW Wheat: $ +0 ($378 to $388). Modest buying occurring compared to human consumption quality trades.
• Feed Barley: $ +0 ($371 to $381). Feedlots are being forced to buy as far south as Wagga with minimal supply available locally. End users are being forced to pay excessive transport costs to secure grain.
• Corn $ +0 ($417 to $427). There are minimal stocks of old corn crop remaining. New crop not yet available for feed use, instead being bought for industrial purposes.
• Sorghum: $ +0 ($333 to $343). Summer crop prospects are quickly deteriorating as dry conditions continue. Irrigated crops in the Darling Downs should start harvest within two weeks.
• Low grain moisture due to this year’s dry conditions may make summer grains valuable.
• Growers are still seeking rain to plant the summer sorghum crop, however time is quickly running out.

• Demand for hay has eased over the past month. Patchy summer rain in December benefitted pasture growth, but growers are now looking for good follow up rain as conditions are drying off quickly.
• The strongest demand for hay from this region is from 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 however are low, due to steady demand from other regions.
• 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: 28mm (Ave: 24mm).
• YTD: 28mm (Ave: 24mm), compared to 0mm this time last year.
• No rain this past week in the central west.
• SFW Wheat: $ -5 ($235 to $245). Export bids quietened down over Christmas. Growers and merchants may be waiting to see if the current market is stable. Prices could potentially ease further.
• F1 Barley: $ +15 ($221 to $231). Feedlot demand is driving feed prices higher at the moment.
• Corn $ +20 ($410 to $420). Prices have risen sharply this week due to old crop stock being very tight and new crop used up for gritting purposes.
• Sorghum $ +10 ($333 to $343). Prospects remain poor for the new northern dry land crop. Late sowing opportunities retreating fast. Worth chasing local irrigated crops.
• Harvest has concluded in the region for what was a poor year due to lower than required spring rain.

• Demand has continued to increase 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, as well as increasing local demand. 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. While some later cut hay is being made the current situation is best described as hand to mouth.
• 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 the Bega valley this week
• SFW Wheat $ +2 ($258 to $268). Export demand has slowed in the last week. Domestic buyers are outbidding export bids as they look to lock away supply. Don’t expect much market volatility in the coming month.
• Feed barley $ +4 ($248 to $258). Prices up this week relative to wheat due to the demand in northern drought areas.
• Triticale $ +10 ($256 to $266). All three winter grains are trading very close to each other. Distorted by the 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.

• Demand for hay is slow at present 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.
• Summer crop plantings were up this year with particular interest in maize for silage. Conditions have been favourable, with good yields and quality expected at this stage.
• 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.
• Another week without rain on the Murray Valley.
• Wheat: $ +2 ($257 to $267). Prices up slightly this week. Harvest mainly for red wheats concluding in the Western District. 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 firming up the east coast, as northern NSW and QLD go deeper into drought. Export bids are currently higher for SA and WA. The discount to wheat is wider than normal.
• Triticale: $ +0 ($253 to $263). Triticale has now all been harvested in the 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 oats weighing more than basic feed oats.
• Grain demand has eased throughout the region.
• 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 has picked up, with particular interest in protein hay (lucerne and vetch).
• 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. Prices remain steady this week.
• Increased demand for lucerne hay over the past few weeks, both locally and from northern Australia will put pressure on supply and prices later in the year. The supply is already being described by some growers as ‘hand to mouth’.
• With increased interest in lucerne hay the market firmed slightly this week, up $20 to $240-280/t delivered.
• 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.
• New season straw is coming onto the market at around $100-$120/t delivered.

• 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.

• Hay production is now coming to an end with the exception of irrigated lucerne.
• There is still interest from buyers sourcing new season lucerne and vetch hay, coming from Northern and Western Victoria. At present the supply is largely hand to mouth. We expect that lucerne hay prices will start to pick up in the coming months, and that supply will be tight in 2014.
• It’s been a big year for pasture hay production with good yields but variable quality being reported.
• Due to reports of variable quality hay all 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.
• After the very hot conditions last week feeding silage has picked up in the past week.
• Prices remain steady but unchanged this week.

• 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.

• After a hot dry spell last week activity in the hay market picked up this week. There is particular interest in lucerne and vetch hay, as growers try to secure their supplies for the year ahead.
• Demand for cereal hay is also starting to pick up. Prices have been fluctuating over the past few weeks and this week softened slightly to $160-$200/t delivered, shifting from $180-$220/t last week. The increased price range is due to the variable quality of cereal hay available.
• After firming slightly last week lucerne and vetch hay prices remain steady this week at $240-$260 delivered.
• Supplies of protein hay, in particular lucerne may be tight this 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 last week, trading is slow at present.

• 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.
• Cereal hay is available but quality is variable.
• Demand for lucerne hay is starting to pick up and supplies are lower than average this year. Despite the increasing demand there is buyer resistance above $220t on farm for lucerne hay. With supplies tighter than usual 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 remain steady this week but may ease in the coming weeks.

• 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 won’t 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. This market doesn’t traditionally pick up until early autumn and 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 Aus, 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 variation 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 about average. 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 lots of hay made and empty haysheds being re-filled.
• Demand for hay has picked up with particular interest in good quality lucerne and oaten hay. Buyers are acting now to secure their 2014 requirements.
• There was an increase in 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.
• There is some interest in growing vetch hay this year in North West Tasmania with a view that it may be better suited to hay production in that region than lucerne hay.
• The supply of pasture hay is good following a big yielding season. Quality is variable due to the patchy weather conditions during the hay season.
• Some small quantities of new season straw are now becoming available. Prices remain steady at $135-$145 delivered.