Grain – Hay Report – 30 January 2014

International & National Summary – Grain:

• Despite market movements throughout the week, international wheat futures ended the week flat. Aiding Australian values the Aussie dollar came off a meagre 0.0047 USc to close at 87.54 USc. The slight downside in the dollar added about A$1/t to March Chicago values, closing on Tuesday night at A$237/t.
• International trades continue to occur in large volumes at prices competitive to current Australian levels. Egypt bought 240,000t of Russian and US soft red winter wheat overnight. A tight shipping stem in Southern states isn’t allowing Australian vendors to even submit bids to these tenders. Australian exporters are currently unable to deliver to buyers when required due to these logistics restrictions.
• In a similar situation, the recent cold snap and freezing temperatures in Canada is causing a bottleneck as logistics fail to cope with the extreme conditions. Despite a record harvest exports have not been able to execute and the country is now faced with burdensome ‘carry in’ stocks’. While this has been supportive to Australian values, when the northern spring arrives logistics will free up and an influx of grain could be available to the market. This will add further competition to Aussie exports with the potential to pull our prices lower.
• Australian values have continued to defy Chicago movements over the past three months as domestic factors have instead influenced price. As the northern hemisphere spring arrives expect the supply of wheat to become more liquid and CBOT to return as a leading indicator for Australian values. There is potential to see a correction to international values, which could see downward pressure on Australian prices.
• Domestically Australian feed values seem to have flattened out following the price hike over the last two weeks. It appears in northern Australia feed barley prices have reached a cap with it now being affordable to execute shipments from either Victoria or South Australia. Expect north-eastern Australia feed barley values to follow SA price movements at the current premium. The price correction over the last week and slight fall in values may make some growers willing sellers and be an opportunity to secure grain for end users. Recent rains will also add to grower’s willingness to part with grain in a period where many have been contempt to store their remaining stocks.
• In the southern export oriented states feed values have plateaued from last weeks rise. Export merchants posting aggressive bids drove the recent demand. Anecdotal evidence suggests many end users locked away required quantities for later delivery early in the harvest period. With many growers holding limited grain purchasing for later delivery is recommended. With prices at profitable levels a high percentage of growers are prepared to conclude their sales for the year in the coming month.
• 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:

• It is becoming increasingly clear that protein hay supplies will 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.
• This week we have had reports of Queensland buyers sourcing hay from as far as Northern Victoria and South Australia. This is likely to put pressure on supplies, and impact prices in these regions later in the year.

Northern Australia:

• Atherton Tablelands and South East Queensland are still reporting steady demand for hay. Feedlots are active buyers.
• Fodder supplies are low right across Northern Australia.
• With low cattle prices and some growers entering their second or third year of drought buyers are now looking for cheaper feed sources such as sorghum stubble to meet demand.

Southern Australia:

• Rain earlier this week will assist summer crops in parts of Northern Victoria and Southern NSW.
• Demand for hay from Queensland may put pressure on supply and prices for hay in the southern regions later in 2014.
• Despite increased interest in lucerne hay over the past few weeks there is still 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 now complete 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: 53mm (Ave: 243mm).
• YTD: 53mm (Ave: 243). This time last year the tablelands had received 243 mm.
• Welcome rain received this week, at last summer cropping can now proceed.
• Wheat: $ -3 ($380 to $390). Wheat down a touch mainly due to lower exchange rates. All the wheat coming onto the Tablelands now is of human consumption quality.
• Barley: $ +0 ($462 to $472).
• Corn prices $ +0 ($350 to $360). Queensland crop stocks are very tight through eastern states. New season corn from local crops is in strong demand despite some scratchy quality in feed corn.
• Sorghum: $ -5 ($340 to $350). This weeks rain won’t stimulate any new sowings but would give some dryland crops a better finish

• 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.
• Prices remain firm but steady this week.

• Toowoomba January Rainfall: 12mm (Ave: 109mm).
• YTD: 12mm (Ave: 109mm), compared to 416mm last year.
• A few misses but most grain locations got something – more rain forecast for later this week.
• This week’s rain is the main factor behind the small drop in sorghum and wheat delivered prices.
• Wheat: $ -3 ($361 to $371). Wheat prices have had a strong run since Christmas. All Queensland wheat stripped was of human consumption quality.
• Feed Barley: $ +0 ($360 to $370).
• Corn $ +0 ($437 to $447). Supplies of old crop corn are very tight all through the east coast. Limited supply of Atherton new season feed corn is coming to the downs and coastal areas.
• Sorghum: $ -5 ($325 to $335). Domestic buyers have been bidding above exporters thus ensuring more of the commodity remains within the state.
• There may be a late sow of sorghum encouraged by high domestic prices for feed.
• Sown dryland Downs sorghum crops will now have a better finish but grains in heads have already been set.

• 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.
• Fodder is now being sourced from Southern NSW, Victoria and South Australia to meet demand but freight is adding considerably to the cost of hay. We expect further price increases in coming weeks as supply comes from even further afield.
• There is limited cereal hay available locally with most being sourced from other regions. 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. Supplies are coming from Northern Victoria and South Australia.
• Straw supplies are very tight locally.
• Prices remain unchanged this week.

• Lismore January rainfall total: 84mm (Ave: 172mm).
• YTD: 84mm (Ave: 172mm), compared to 279mm this time last year.
• SFW Wheat: $ -3 ($395 to $405). Price down, similar price falls for sorghum and wheat sourced from the Liverpool plains.
• Feed Barley: $ +0 ($383 to $393).
• Corn $ +0 ($442 to $452). Supplies of the old crop corn are very tight all through the east coast. Atherton new season feed corn is coming south to the Downs and coastal areas.
• Sorghum: $ -5 ($342 to $352). Local coastal sorghum often has difficulty getting down to the moisture levels acceptable to the grain trade.
• Keeping in contact with contractors is a good way of identifying who is going to sow a grain crop on this recent rain.
• Buying local will save the road freight down from either the Downs or Liverpool Plains areas.
• Local coastal sorghum often has difficulty getting down to moisture levels acceptable to the grain trade.

• There has been patchy rain through the region which has eased the slightly demand for hay.
• Local cereal hay supplies are low due to steady demand through spring and early summer last year.
• Due to dry conditions it is expected yields for all hay; particularly lucerne hay will be down again this year putting further pressure on the supply for later in 2014.
• Lucerne hay supplies are low, due to low yields and steady demand.
• 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: 56mm (Ave: 24mm).
• YTD: 56mm (Ave: 24mm), compared to 28mm this time last year.
• Rain this week, probably not enough to do anything useful, nor damaging.
• SFW Wheat: $ +3 ($253 to $263). No substandard wheat in central west this year. Exports out of Newcastle expected to be very low as stockfeed buying is exceeding milling tonnages. The strong run of wheat price increase is continuing here.
• F1 Barley: $ +5 ($241 to $251).
• Corn $ +0 ($435 to $445). Prices very high as stocks of old crop feed corn are low all through the east coast states. New crop expected in the third week of February, hence can expect a large drop in price then.
• Sorghum $ -2 ($353 to $363). These prices are based on Liverpool Plains sorghum being trucked south.
• Demand for new grain supplies for drought feeding should start to wind back, provided northern rains this week are followed up.

• 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 due to strong demand.
• 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: 17mm (Ave: 53mm).
• YTD: 17mm (Ave: 53mm), compared to 50mm this time last year.
• No rain in the Bega valley this week
• SFW Wheat $ +3 ($267 to $277). Wheat prices are continuing a strong run of late. This is helped by strong buying from drought conditions in the north, and all wheat being of human consumption category and therefore of interest to exporters as well.
• Feed barley $ +5 ($260 to $270). Feed barley prices are now very close to wheat.
• Triticale $ +0 ($261 to $271). Many triticale producers are holding the commodity and will not offer it till winter.
• Oats: $ +0 ($236 to $246).

• 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 eased and 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: 10mm (Avg: 34mm)
• YTD: 10mm (Ave: 34mm), compared to 4 mm this time last year.
• Just five or six millimetres of rain throughout the irrigation dairy districts of northern Victoria last Friday. There was even less down river from Echuca. This has put the region into normal irrigation mode.
• Areas to the east of Yarrawonga to Benalla received heavy rains from two storms and delivered 40 millimetres or more over Friday.
• Wheat: $ -2 ($253 to $263). After a strong run on wheat prices since harvest, there was a slight softening this week. It may not be permanent though. Export prices have been very responsive to changes in the value of the Australian dollar.
• F1 Barley: $ +0 ($231 to $241). The discount of barley to wheat is sitting at $22 and within the traditional discount range.
• Triticale: $ +0 ($253 to $263). The triticale market is quiet as most growers sold what they wanted to at harvest. The rest is being stored on farm until winter.
• Feed Oats: $ +3 ($203 to $213). There is quite strong demand for oats coming from the Strathbogie Ranges and north-eastern Victoria.

• Demand for hay remains steady, with particular interest in protein hay (lucerne and vetch).
• There are good supplies of new season cereal hay locally. 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.
• Straw production is underway and with this year seeing 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.
• Prices remain firm but unchanged this week.

• Sale January rainfall: 22mm (Ave: 45mm).
• YTD: 22mm (Ave: 45mm), compared to 4mm this time last year.
• There was 20 to 40 mm of rain through east and west Gippsland last Friday.
• SFW Wheat: $ -2 ($303 to $313). After a long run of firm prices, wheat has started showing some weakness over the past two weeks. The price is very sensitive to movements in the value of the Australian dollar.
• Barley: $ -2 ($275 to $285). The margin between wheat and barley has grown to $28 a tonne.
• Triticale: $ +0 ($295 to $305). Most North East and Riverina growers and traders have their triticale stored in silos. It is expected that the triticale wont be offered for sale until winter.
• Feed Oats: $ +3 ($229 to $239). Most interest in feed oats is for horse feeds and other stockfeed rations.

• Demand remains steady for lucerne and vetch hay, being sourced from Western and Northern Victoria. Demand for all other hay varieties remains slow at present.
• The supply of lucerne hay is largely hand to mouth already. 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 feeding silage has picked up in the past few weeks.
• Prices remain steady but unchanged this week.

• Port Fairy January rainfall: 20 mm (Ave: 34mm).
• YTD: 20mm (Ave: 34mm), compared to 4mm this time last year.
• There was no rain this past week despite areas in the north and east of the state receiving some heavy falls on Fridays.
• SFW1 Wheat: $ -2 ($249 to $259). Most wheat in the district is of human consumption quality due to little frost damage, unlike northern Victoria. Prices are very sensitive to variations in the value of the Australian dollar. Harvest is still continuing.
• Feed Barley: $ -2 ($230 to $240). The discount of barley to wheat is now back to the range of $20 to $25 a tonne.
• Triticale prices $ +0 ($250 to $260). Strangely, there are still a lot of triticale crops that are still unharvested. It is mostly small paddocks on smaller properties that require contractors with smaller gear.
• Feed oats $ +3 ($212 to $222). The oat price continues to rise with the drive coming from both the horse industry and Victorian sheep and wool industry. Milling oats are trading at a premium of $30 a tonne.
• There are still some crops to be stripped in the area. It is clear that the grain-harvesting contractors are leaving the smaller paddocks until last. Purchases can be made out of contractors’ field bins.

• 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. Supplies are good but there is some variation in quality.
• Protein hay is still in demand but prices remain steady this week. We expect to see prices increase in the coming months as supplies get tighter.
• Big pasture hay yields have been reported and supplies are good coming into 2014.
• Prices remain steady this week.

• Mount Gambier January rainfall: 28mm (Ave: 27mm).
• YTD: 28mm (Ave: 27mm), compared to 4mm this time last year.
• There was no rain at Mount Gambier again this week and conditions were very hot from Saturday to Tuesday.
• Wheat $ +5 ($271 to $281). The price rise follows stronger exporter bids, which have been partly driven by the lower value of the Australian dollar. There are now significant quantities of red winter wheats now grown in this region of South Australia.
• Feed barley $ -4 ($249 to $259). The discount of barley to wheat is now back to the traditional range of $20 a tonne.
• Triticale $ +0 ($255 to $265). Currently trading at a discount to wheat. It is being grown in areas up to Millicent and further north to Meningie.
• Oat prices $ +0 ($207 to $217). The supplies of oats within South Australia east of Port Augusta are scarce. Farmers are not willing sellers at this time. Similarly, traders want a good margin or will continue to hold onto their oats.
• Wheat prices are $47 less than Melbourne and F1 barley prices are cheaper in Adelaide by $30 a tonne. It is important to make sure that the grain origin is South Australia at this time whenever a merchant or trader is used.

• Demand for hay remains fairly slow at present which is typical of this time of year.
• Cereal hay is available but quality is variable.
• Demand for lucerne hay is starting to pick up, with reports this week of some hay moving up to Queensland. Locally supplies are lower than average this year and demand from outside the region now will put pressure on the local market later in the year.
• 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: 9mm (Ave: 16mm).
• YTD: 9mm (Ave: 16mm). 13mm this time last year.
• There was rain this week on the far west coast. This allowed grain growers to follow it with a herbicide spray to help manage the 2014 winter cropping.
• Any rain that did come east of Port Augusta went too far north of any dairy farming country.
• Wheat $ +6 ($242 to $252). Wheat estimates are at the highest since 2010-11 season and all of very good quality. There are stronger bids from exporters as they are currently favouring South Australian and West Australian. This is because they’re further from the drought areas of northern New South Wales and Queensland
• Feed barley $ -4 ($221 to $231). There was some movement around wheat and barley price bids by exporters this week. However, the discount of barely to wheat is inside the normal range of $20 to $25 a tonne.
• Triticale $ +0 ($235 to $245). It is expected that all of the South Australian triticale produced will be consumed locally.
• Feed oats $ +0 ($183 to $193). Some traders are currently organising parcels of oats from east of Port Augusta for export. But the bids for oats have remained unchanged.

• 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. There has been some interest from Queensland buyers who are taking lower grade, lower priced hay to meet demand in drought affected regions.
• 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: 0.4mm (Ave: 12mm).
• YTD 0.4mm (Ave: 22mm), compared to 2mm this time last year.
• Still no rain this week and the hot conditions continue. A new set of heat wave conditions will come this week and over the weekend. Some storm rain at Southern Cross and Bonnie Rock has been forecast. It will allow grain growers to spray their crop to preserve soil moisture.
• Wheat: $ +0 ($300 to $310). Southern Queensland and northern New South Wales is still short of domestic grain, despite some rain this week in cropping areas. It is expected that some grain will be shipped around to Brisbane before the next wheat harvest.
• Feed barley $ +0 ($275 to $285). Currently trading at a discount to wheat of $25 a tonne. This discount is larger than other stockfeed grain centres of Australia.
• 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). There is little interest in oats in most areas of Western Australia, except around the port of Geraldton.

• 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: 35mm (Ave: 42mm).
• YTD: 35mm (Ave: 42mm), Compared to 15mm this time last year.
• No rain this week on either the main island or King Island.
• Wheat $ +0 ($330 to $340). There is a $20 margin for wheat bought from Melbourne compared to South Australian ports. Therefore it is expected that more bulk grain will be sourced from South Australia this year.
• Feed barley $ +0 ($320 to $330). Currently trading at a discount to wheat of only $10.
• Triticale prices $ +0 ($315 to $325). Mainland triticale markets are quiet as most growers sold what they wanted to at harvest and storing the rest until winter.
• Oats prices $ +3 ($286 to $296). The price for oats in South Australia and Victoria are both stronger.
• Midland barley and wheat crops are now being stripped and taking advantage of the hot weather. The harvest is not expected in northern areas of the state until March.
• The barley that has been coming off has had good yields and quality. Wheat tends to be left until later.

• 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.
• 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.