Grain – Hay Report – 7 February 2014

International & National Summary – Grain:

• Inclement weather in the US and Canada is continuing to cause concern over the incoming crop in the northern hemisphere. The extreme conditions have resulted in International futures values gradually increasing. Analysts are predicting as much as 45% of the US winter wheat has already been impacted by the dryness and winterkill. As a result CBOT March wheat futures closed on Tuesday night at A$242/t, up A$5 /t from last week.
• International demand for Australian wheat remains consistent as trade continues to occur on the global market in healthy volumes. While a tight shipping stem in southern Australia is preventing Australian vendors from executing tenders for early delivery it shows Australian wheat is competitive at current values.
• As the northern hemisphere spring arrives and the wheat market becomes more liquid expect Australian values to be again be dictated by Chicago futures movements. Currently domestic prices continue to be influenced by local factors.
• As has been reiterated over previous weeks the Australian feed environment is split into two different markets; northeast Australia and the export oriented southern states of Vic, SA and WA. In good news for end users feed values slipped in central and southern Queensland. The region received constant rain since late last week, which was a welcome relief to the drought conditions experienced over the past 6 months. Expect a short-term price decrease but grain values to continue to hold at historically high levels. Until there is significant confidence in new season production expect feed prices to be maintained. Also fuelling the recent price drop it seems feed-lotters demand is satisfied with minimal trade activity occurring. This will undoubtedly be short lived.
• 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. 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:

• Buyers in Queensland and Northern NSW are continuing to source feed from Southern NSW, Victoria and South Australia to meet steady demand. It looks like this trend will put pressure on hay supplies and prices in Southern Australia later in the year.
• Protein hay supplies will be tight in 2014. Any buyers seeking protein hay for 2014 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. 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.
• There are reports of straw being baled now in Northern NSW from 2013 winter crops as a cheaper roughage source. This straw is moving quickly.

Southern Australia:

• Demand for hay from Queensland and Northern NSW is likely to put pressure on supply and prices for hay in the southern regions later in 2014.
• At this stage many growers in Victoria and South Australia are opting to store their cereal hay until later in the year and considering their own hay requirements before looking at their marketing options.
• There is clear indication that supplies of protein hay are going to be tight later in 2014.
• Vetch hay can be sourced from the Wimmera / Western Victoria however most good quality new season vetch is already sold. Lower grade vetch hay is available but may become difficult to source soon.
• Increased interest in lucerne hay has many sellers describing the market as ‘hand to mouth’.
• 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 strong supply.

Western Australia:

• Hay trading is fairly slow on the domestic market although there is a small amount of interest in cereal hay from the dairy sector.
• 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 February rainfall: 67.4mm (Ave: 248.3mm).
• YTD: 121.2mm (Ave: 491.2). This time last year the tablelands had received 251.4mm.
• With a big dose of rain in the past week the wet has well and truly arrived.
• Wheat: $ +0 ($380 to $390). The prices have remained steady in central Queensland and the recent rain bodes well for soil moisture leading into March for the seeding of 2014 wheat crops.
• Barley: $ +0 ($462 to $472). Barley prices have remained steady with no increase in price.
• Corn prices $ -50 ($300 to $310). Prices fell sharply this week as new season corn crops are now being stripped on Darling Downs; this has reduced the scarcity factor that has held the prices so high in the previous weeks.
• Sorghum: $ +3 ($343 to $353). New supplies of sorghum coming off in southern Queensland are increasing the supply while heavy rains have enabled some of the areas to seed sorghum.

• 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 February Rainfall: 0mm (Ave: 118.6mm).
• YTD: 12mm (Ave: 227.5mm), compared to 429mm last year.
• Still no rain as of yet for the Darling Downs.
• Wheat: $ -7 ($354 to $364). All Queensland wheat in storage is of human consumption category and with the drought continuing the competition will continue.
• Feed Barley: $ -12 ($348 to $358).
• Corn $ -60 ($377 to $387). Downs feed corn is now available from local crops and the need to truck it down from Atherton no longer exists. The prices are back down to sensible relativities to wheat and sorghum.
• Sorghum: $ +3 ($328 to $338). Domestic buyers are still outbidding exporters thus keeping more grain within the state and reducing the need for grain to come from other Australian production areas.

• Feed corn is now being stripped from Down’s grain farms, some of which is irrigated but mostly dryland.

• 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. Lucerne hay increased about $15 this week 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.

• Lismore February rainfall total: 11mm (Ave: 147.3mm).
• YTD: 94.8mm (Ave: 319.5mm), compared to 280.4mm this time last year.
• SFW Wheat: $ -7 ($388 to $398). All Queensland wheat in storage is of human consumption category. The drought continues so the competition remains.
• Feed Barley: $ +0 ($383 to $393). Prices have remained steady from last week.
• Corn $ -70 ($372 to $382). Feed corn prices are sharply lower now that the Downs crops are being stripped thus removing the extreme shortage of this commodity that was present last week. The need to truck it down from Atherton no longer exists.
• Sorghum: $ +3 ($345 to $355). Crops are light through northern New South Wales and southern Queensland however with lower exports due to the domestic prices exceeding exporter bids, there should be enough of this commodity to run through to October when the new season barley will become available.

• There has been patchy rain through the region which has slightly the eased demand for hay. However demand from Northern NSW in general remains strong.
• Local cereal hay supplies are low due to steady demand through spring and early summer.
• 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. Some buyers are now sourcing hay from Victoria and South Australia to meet demand.
• Following strong demand in the past few months straw supplies are low. Some growers are now bailing 2013 stubble to meet the demand for roughage from Northern and Western NSW.
• Pasture hay production is underway with reports of good quality being reported, however feed analysis has shown some variation in quality.

• Forbes February rainfall: 0mm (Ave: 56.6mm).
• YTD: 56mm (Ave: 80.2mm), compared to 29.6mm this time last year.
• No rain this week with drought conditions continuing in north of the state.
• SFW Wheat: $ +3 ($256 to $266). Current season wheat is all of human consumption or it has the potential to be blended into one of the main selling categories.
• F1 Barley: $ +3 ($244 to $254).
• Corn $ -20 ($415 to $425). Down sharply now that the new crop feed corn is being stripped in southern Queensland and soon to be followed by northern New South Wales.
• Sorghum $ +13 ($366 to $376). Sorghum prices remain strong for this region, as the drought to the north of here shows no sign of abating. The reach for grain further south is increasing the domestic prices of sorghum within the summer rainfall grain production areas.
• With domestic prices still remaining above exporter bids, more grain is remaining within the state and not going out through Newcastle or Port Kembla.

• Demand has continued to increase with hot dry conditions limiting paddock feed. Livestock and dairy farmers 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 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.

• Bega February rainfall total: 0mm (Ave: 98.5mm).
• YTD: 17mm (Ave: 150.9mm), compared to 50mm this time last year.
• SFW Wheat $ +3 ($270 to $280).
• Feed barley $ +0 ($260 to $270).
• Triticale $ +0 ($261 to $271). Most of the triticale in southern New South Wales and Victoria is now bedded down. Growers may have an offer price on their stocks but they are above the current market and will be more interested in selling in the coming winter.
• Oats: $ +10 ($246 to $256). Feed oats for drought reserves are in demand with the hints of an El Nino developing later in the year.

• 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 in southern NSW later in the season. Buyers should expect prices rises in the coming weeks and 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. Lucerne hay can still be sourced from irrigated areas such as Northern Victoria and the Riverina. Supplies will be very tight later this year due to strong demand. Buyers seeking protein hay such as lucerne are encouraged to lock in their requirements now.
• Supply and quality of new season straw is good. Trading is slow at present. The price for new season straw is around $110-$120 delivered.

• Tatura January Rainfall total: 0mm (Avg: 34mm)
• YTD: 10mm (Ave: 67.6mm), compared to 4 mm this time last year.
• No rain anywhere this week with the heat running all day and through into the night.
• Wheat: $ +0 ($253 to $263). Wheat price remains flat as the interest in buying wheat has declined compared to pre Christmas and early January.
• F1 Barley: $ +0 ($231 to $241).
• Triticale: $ -3 ($250 to $260). Not a lot of trading activity in triticale at present time as the growers are waiting for a stronger demand once we get into the winter season.
• Feed Oats: $ +4 ($207 to $217). As the dry conditions continue the buying interest in oats has increased through northern Victoria.

• Demand for hay from local dairy farmers has increased slightly over the past few weeks.
• Increased demand for cereal and lucerne hay from northern Australia will put pressure on supply and prices later in the year.
• Protein hay (lucerne and vetch) is in fairly tight supply already. Vetch hay can be sourced from the Wimmera/ Western Victoria although quality is variable.
• Prices for lucerne and vetch increased about $15 to $250-$300/t delivered this week.
• Straw production is underway and it looks set to be an average or above average season.
• New season straw is trading at $90-$110/t delivered on farm.

• Sale February rainfall: 0.6mm (Ave: 43.3mm).
• YTD: 22mm (Ave: 88.1mm), compared to 5.4mm this time last year.
• SFW Wheat: $ +0 ($303 to $313). The prices have remained flat this week.
• Barley: $ +0 ($275 to $285).
• Triticale: $ +0 ($295 to $305). Most northeast triticale growers are holding triticale in farm silos waiting for stronger demand to emerge in winter.
• Feed Oats: $ +0 ($229 to $239).

• Demand remains steady for lucerne and vetch hay but is slow for all other hay varieties.
• The supply of lucerne hay is largely hand to mouth at this stage. We expect that lucerne hay prices will start to pick up in the coming months, as supply becomes tight later in the year.
• 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.
• Some straw is available in Gippsland but quality is variable. Locally sourced straw may be available for around $110-$120t delivered but prices are speculative at present due to the lack of trading.
• Prices remain steady but unchanged this week.

• Port Fairy February rainfall: 0mm (Ave: 32.4mm).
• YTD: 20mm (Ave: 66.2mm), compared to 17.4mm this time last year.
• No rain for the past week anywhere.
• SFW1 Wheat: $ +0 ($249 to $259). Dry condition for the past three weeks has enabled the last of the wheat and triticale crops to be stripped.
• Feed Barley: $ +0 ($230 to $240). Prices have stayed flat over the past week.
• Triticale $ -3 ($247 to $257). Triticale needed to come down to be less than wheat and probably has to drop further still. But growers view it as a grain to be sold in winter when the demand increases.
• Feed oats $ +4 ($216 to $226). More interest in buying feed oats for horses and also as a drought reserve on sheep and cattle properties through the south west of the state.
• The chance of another El Nino later this year has been noted.

• Vetch and clover hay are still moving into south west Victoria. Demand for cereal hay is also starting to pick up.
• Supplies of cereal hay 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 February rainfall: 0mm (Ave: 25.2mm).
• YTD: 28mm (Ave: 52.34mm), compared to 20.4mm this time last year.
• Wheat $ -3 ($268 to $278). Significant quantities of red winter wheats now grown in the south east of South Australia.
• Feed barley $ -1 ($248 to $258). The market wants to go lower – currently steady on low activity in Victoria. Exporter bids are down $2 for delivery up country to Port Adelaide.
• Triticale $ +0 ($255 to $265). Most growers with triticale in their own silos will hold onto it until winter, irrespective of price movements between then and now.
• Oats $ +2 ($209 to $219). The buying of feed oats by south eastern stockowners is increasing so that they can put it into farm silos as a drought reserve for sheep.
• Victorian wheat and barley prices are steady and being held up by the demand for grain from northern New South Wales however South Australian grain markets are not currently in the loop for grain to move north to fill the drought demand. This means that grain prices in this region are dependent on the source areas of the grain, more than the grain supplier.
• As we have previously suggested continue to buy any wheat and barley requirements out of South Australia rather than western Wimmera and Victoria.

• 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 from the Keith region. 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, with prices remaining steady this week but may ease in the coming weeks.

• Murray Bridge February rainfall: 0mm (Ave: 17mm).
• YTD: 9mm (Ave: 33mm). 24mm this time last year.
• There was no rain this week, but slightly cooler weather.
• Wheat $ -6 ($236 to $246). South Australia has had their best wheat crop since 2010-11 when they produced 5.818 million tonnes. Wheat is all of very good quality – clean and bright and of milling standards. South Australia and Western Australia are the states of most interest to exporters, as the local scene is not complicated by a large or strong domestic demand for wheat.
• Feed barley $ -2 ($219 to $229). With both South Australia and Western Australia having large barley crop this season, bid prices are lower.
• Triticale $ -5 ($230 to $240). As wheat prices come down, Triticale will also follow. Triticale is not an export grain but still takes it price at most times from export wheat bids.
• 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. Most export oats will go out of a west coast terminal.

• Demand for hay on the domestic market is slow at present. This 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. There has been some interest from Queensland buyers who are taking lower grade, lower priced hay to meet demand in drought affected regions.
• Supplies of protein hay (medic and vetch) are 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.

• Smithton February rainfall: 0mm (Ave: 32mm).
• YTD: 35mm (Ave: 74mm), Compared to 30mm this time last year.
• No rain within north west coast areas this past week.
• Wheat $ +0 ($330 to $340). With South Australian prices down $ 6 this week, market weakness should be felt in Tasmania sooner rather than later.
• Feed barley $ -5 ($315 to $325). As South Australian prices slide below those of Victoria, South Australia is becoming a better source area for Tasmania.
• Triticale $ +0 ($315 to $325). Some easing of bid prices on the mainland is in line with the easing feed grain demand in southern states. Most mainland holders of triticale will hold till winter when dairy demand usually increases.
• Oats $ +4 ($290 to $230). There has been Stronger demand from mainland stockowners to replenish stocks as drought reserves this week. With a preliminary warning about Australian east coast El Niño weather pattern.
• Wet winter conditions adversely affected all winter cropping activities so local northern wheat and barley crops won’t be ready till March.
• Midland crops however are being striped now.
• Most going into central storage, but cash sales are under pressure from slipping South Australian wheat and barley prices.

• 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. Both yields and quality were good this season.
• 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.

• It’s been a big pasture hay season giving growers the opportunity to re-fill empty haysheds.
• Demand for hay has picked up from the dairy sector. There is particular interest in good quality lucerne and oaten hay. Buyers are acting now to secure their 2014 requirements.
• There was an increased volume 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 however quality is variable due to the patchy weather conditions during the hay season.
• Some small quantities of new season straw are now becoming available.