Grain – Hay Report – 21 March 2014

International & National Summary – Grain:

• International values continue to rally as funds look to gain further exposure through speculative buying at current levels. CBOT wheat futures pushed A$13/t higher in the last week to close at A$274/t on Tuesday night. The Australian dollar rising slightly over the week to close at 90.3USc helped offset the lengthy gains seen in Chicago.
• Speculative buying was largely on the back of the escalating crisis in Crimea. The physical flow of grain is yet to be affected with international consumers still purchasing Ukrainian grain and Ukraine maintaining exports. However the potential impact on logistics and further movement of grain is causing concern. Expect any political developments to have a significant impact on international values and subsequently cause further market volatility. If the situation is resolved quickly the premiums this crisis has caused will dissolve rapidly.
• US winter wheat crop conditions are having a bearish influence on international wheat values. As the crop begins to break dormancy there isn’t sufficient moisture at this time of year for spring growth. Traditionally this time of year is volatile as the market focuses firmly on US crop development. There is still three months until the winter wheat harvest in the US and if rains are received the spring the yield potential could turn around significantly. Crop estimations at this time of year are nothing more than estimations that fuel the market and should not be read into too much. Volatility in the market can however present opportunities to make purchases in periods where the market troughs.
• The recent rally in international values has been reflected in domestic Australian prices for both old and new crop. Grower’s reluctance to sell combined with buyers willingness to bid at increased values has seen local values mirror offshore market gains.
• Unfortunately for end users in the southern states strong export demand continues to drive prices. The spread between barley and wheat has widened as barley fails to reflect the rallies experienced in wheat. Until general rains are felt across the state many grain producers are content to hold remaining grain having already locked in profits for the past harvest. Expect little supply to enter the market until they are confident of adequate moisture for production. This could see prices temporarily inflated until there is more liquidity in the market.
• The northern feed markets also saw increases on the back of international gains. Reports indicate consumers are only purchasing enough feed to maintain cattle numbers as they eagerly await price relief before further commitment. The dry conditions continue to elevate prices. As prices have now reached import parity international movements will instead heavily dictate price movement. Expect significant price drops if rains so badly needed throughout the region arrive prior to planting.

National Summary – Hay:

• This week across the country we are seeing prices continue to strengthen as buyers try to secure their winter feed. Most notably livestock producers in the very dry New England area of NSW have become active buyers over the past few weeks as they prepare for the season to turn cold.
• Lucerne production is underway again in Central West NSW after good rain in February has help to boost growth over the past few weeks. Supply remains short and new season hay will not last long, if it isn’t already sold.
• Lucerne and vetch hay are becoming increasingly difficult to source, with prices increasing again this week in response to the strong demand. There are still some supplies throughout South East South Australia and Victoria however buyers are encouraged to act quickly to secure supplies for the coming months.

Northern Australia:

• Despite patchy rain through some regions feed remains very short. Demand for hay is steady and buyers are now sourcing cereal hay from Victoria and South Australia.
• With many summer crops of maize, sorghum and even soy beans struggling due to the hot conditions earlier in 2014, there is increased interest in baling failed crops. All buyers are reminded of the risks of feeding drought stressed crops to drought stressed stock. Seek advice on using these new feeds so that any risks can be understood before going ahead.
• Straw is becoming difficult to source and sorghum stubble, where available, is being baled as an alternative.

Southern Australia:

• Most cereal hay supplies in Southern NSW have been cleaned out and active Northern buyers are now looking to Victoria to meet their demand.
• Lucerne hay production is underway again in the irrigated regions of Northern Victoria. Growers are up to their fourth or fifth cut. Much of this hay is presold or is moving quickly due to the steady demand from Northern buyers, chaff mills and local dairy farmers.
• There are good supplies of pasture hay throughout most of Victoria. Quality is variable and sourcing good quality pasture hay for trading is becoming more difficult.

Western Australia:

• The hot dry summer and continuing dry conditions across much of WA mean that demand for hay from the livestock and dairy producers remains steady. Cereal hay is most sought after at this stage.
• Cereal hay and straw supplies are good at present. However hay quality is variable.
• Lucerne hay is difficult to source and prices remain firm.
• Despite a lower yielding pasture hay season in South West WA last year the quality of hay made was quite high.

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 March rainfall: 4.2mm (Ave: 173.5mm).
• YTD: 268mm (Ave: 664.7). This time last year the tablelands had received 514.2mm.
• Continuous rains since January.
• Wheat: $ +5 ($400 to $410). Wheat prices up modestly in central and northern Queensland in comparison to northern New South Wales this week.
• Barley: $ +3 ($480 to $490). Demand for feed barley coming from feedlots at this time.
• Corn prices $ +5 ($355 to $365). This price range is based on local corn.
• Sorghum: $ +2 ($352 to $362). Sorghum prices are up based on the new crop harvest from central Queensland, starting in April. Limited sorghum supply this year.
• Increasing concerns about wheat yields from crops to be sown in Central Queensland without stored soil moisture.

• There has been rainfall throughout February, easing local demand for hay slightly.
• Demand remains firm from other parts of Queensland. There are also reports this week of hay being sent to Northern NSW.
• Hay supplies are very low due to the strong demand.
• Hay production has now ceased until the drier weather sets in.
• Pasture hay is trading at $280-300/t.

• Toowoomba March Rainfall: 4.8mm (Ave: 66.7mm).
• YTD: 28.8mm (Ave: 294.2mm), compared to 687.4mm last year.
• The third week without any rain through most parts of the Darling Downs. A storm in Warwick delivered 21 millimetres. But the heavy clay soils need at least 150mm before sowing in April or May to give growers confidence in their crop.
• Wheat: $ +9 ($383 to $393). Wheat prices are up strongly based on exporter bids. The main driver is still future wheat exports out of the Black Sea ports with increasing Russian influence and unsettled matters related to wheat security in the northern hemisphere.
• Feed Barley: $ +3 ($366 to $376). The rise in barley prices maintains the discount to wheat at slightly less than $20 a tonne. The demand from feedlots seems to be covered through to July.
• Corn $ +5 ($407 to $417). Corn prices are up this week following the rise in wheat prices. Supplies of corn in the eastern states are currently adequate.
• Sorghum: $ +4 ($336 to $346). It seems that there is enough sorghum from old crop and new harvest to meet the demands of domestic consumers.

• Patchy rain in some parts of the South East will see a green pick coming up in the coming weeks. It is unlikely that this will bring much relief in terms of feed.
• Demand for hay remains strong and supplies of all hay varieties are low. Most hay is being sourced from Victoria and South Australia to meet demand.
• There are high numbers of cattle in feedlots, partly driven by low priced cattle from drought affected regions. Feedlots continue to be active buyers.
• Cereal hay is being sourced from South Australia and North Central Victoria. Landed in Southern Queensland buyers are paying around $400-$450/t. Further price rises are expected in the coming weeks as competition from farmers in the south picks up.
• Lucerne hay is very difficult to source. In most key lucerne growing regions the market is hand to mouth and we expect supplies to run very low into winter. Landed into southern Queensland lucerne hay prices are around $500/t.
• Summer crops are currently being harvested where possible and yields are well below average. There is some interest in baling failed maize and sorghum crops for hay to meet strong demand for feed.
• There are small amounts of sorghum stubble being baled. Sorghum stubble and any other straw where it can be sourced, is trading for around $200-$260/t landed.

• Lismore March rainfall total: 16.8mm (Ave: 138.6mm).
• YTD: 120.8mm (Ave: 458.1mm), compared to 715.8mm this time last year.
• The Northern Rivers had a well spread 10 millimetres of rain this week. The rains since January have provided opportunities for summer cropping of mung beans and soybeans as row crops. Plus some sowing of corn and sorghum dryland crops.
• SFW Wheat: $ +9 ($417 to $427). Wheat prices are up strongly based on exporter bids. The main driver is still future wheat exports out of the Black Sea ports with increasing Russian influence and unsettled matters related to wheat security in the northern hemisphere.
• Feed Barley: $ +3 ($401 to $411). The rise in barley prices maintains the discount to wheat at slightly less than $20 a tonne. The demand from feedlots seems to be covered through to July.
• Corn $ +5 ($402 to $412). Corn prices are up this week following the rise in wheat prices. Supplies of corn in the eastern states are currently adequate.
• Sorghum: $ +4 ($354 to $364). It seems that there is enough sorghum from old crop and new harvest to meet the demands of domestic consumers in South East Queensland and here.

• Demand remains strong, with livestock producers, dairy farmers and hobby farmers all active buyers. With conditions particularly bad around the New England, livestock producers from that region have become active buyers, sourcing higher grade hay and silage where possible.
• All hay supplies are low, due to decreased yields and steady demand. Buyers are now sourcing hay from Victoria and South Australia to meet demand.
• Cereal hay from the Southern regions is around $400-$450/t landed.
• Lucerne hay is very difficult to source and prices are now over $500/t landed.
• All grades of pasture hay are trading around $200-250/t delivered. Good quality hay is difficult to source.
• There has been a lot of interest in baling failed summer crops (sorghum, maize and soy beans) this year.
• Round bale silage is trading for around $100/t ex farm.
• Straw supplies are also low. There has been interest in baling sorghum stubble this year. Buyers are advised to be wary when feeding drought stressed crops to drought stressed cattle.

• Forbes March rainfall: 89mm (Ave: 46.7mm).
• YTD: 185mm (Ave: 126.9mm), compared to 146.4mm this time last year.
• No rain at Forbes this week. But the rain Forbes received three weeks ago has set up a strong cropping program for winter crops.
• SFW Wheat: $ +10 ($281 to $291). Wheat prices are up strongly based on exporter bids for port zones that have tonnage available. This includes Port Kembla but excludes Newcastle at the moment. It is believed that recent price rises may have been too sudden and too drastic to be sustained.
• F1 Barley: $ +5 ($254 to $264). The demand from feedlots appears to have been covered earlier in the year. The margin between barley and wheat has widened, but mainly due to the large price jump in wheat.
• Corn $ +10 ($410 to $420). There has not been much corn trading at this higher price plateau. Many holders of feed corn appear to be holding stocks in hope of stronger prices later in the year.
• Sorghum $ +0 ($362 to $372). Sorghum domestic users seem to have covered their tonnage requirements until the end of June.

• The season has improved with good rain over the past few weeks boosting lucerne production and providing enough bulk feed for cattle feed in most areas. Local demand has eased slightly as more paddock feed is available.
• Demand has continued to remain strong from hobby farmers, feed mills and Northern buyers, particularly for lucerne hay. Currently farmers in the New England and Southern Queensland regions are active buyers as they try to secure feed for the coming winter months.
• Cereal hay is very difficult to source locally due to the steady demand earlier in the year.
• Lucerne hay supplies are low and demand remains firm. Prices are around $380-$420/t on farm depending on quality. Small squares are available in limited supply and varying quality, trading for around $12-$15/ bale.
• Straw is also in strong demand. Some local growers have now opted to bale last year’s cereal stubble to take advantage of the market and to clean up paddocks. Prices are around $110-$130/t on farm.

• Bega March rainfall total: 22.2mm (Ave: 78.3mm).
• YTD: 63mm (Ave: 229.2mm), compared to 158mm this time last year.
• Bega received 5 millimetres of rain this week.
• SFW Wheat $ +10 ($295 to $305). Wheat prices are up strongly based on exporter bids for port zones that have tonnage available. This includes Port Kembla, Melbourne and Geelong. It is believed that recent price rises may not be sustainable and could be an overreaction to possible outcomes that might not happen.
• Feed barley $ +5 ($268 to $278). The discount to wheat is widening for feed barley.
• Triticale $ +10 ($281 to $291). There has been no new business undertaken at these prices. But holders of triticale are moving their sell prices up with wheat.
• Oats: $ +0 ($270 to $280). There was no change in oat prices this week. However, expect that oats will be caught in the upward price rise that other grains are experiencing at some point.

• Demand remains steady.
• The strong demand for cereal hay from Queensland is starting to impact supply in southern NSW. Prices are rising due to the increased competition in the Southern market. Local buyers who purchased early will be well positioned for the season ahead.
• Supplies of lucerne hay are very low in most parts of eastern Australia, particularly in the dry land production areas. Prices are reflecting the tight supply and may pick up further in the coming weeks.
• Supply and quality of new season straw is good. There is steady demand at present from both dairy and livestock. Straw is now trading about $180-$200/t delivered, up $20 this week.
• Maize silage production was steady this year with good yields reported.

• Tatura March Rainfall total: 7.4mm (Avg: 35.3mm)
• YTD: 28.4mm (Ave: 102.9mm), compared to 49.9mm this time last year.
• Mostly dry on the irrigated northern plains this week. Some rain went through the southern Goulburn Valley with Rushworth (24mm), Stanhope (13mm) and Shepparton (11mm) receiving rain. The irrigation programs are continuing in most districts.
• Wheat: $ +10 ($283 to $293). Wheat prices continue to run away. This movement follows the continuing uncertainty in Crimea and how this may affect wheat security and movements out of the Black Sea.
• F1 Barley: $ +5 ($245 to $255). Barley prices are up on improved exporter bids in port areas with enough supplies to fill vessels. This includes Melbourne and Geelong port zones.
• Triticale: $ +0 ($255 to $265). Triticale prices are steady at present. However, it is expected that we wont see triticale equal or less than the feed barley price.
• Feed Oats: $ +5 ($225 to $235). Demand is coming from graziers gathering feed oats for filling farm silos. There are thoughts that the demand from New South Wales this winter will see the prices firm.

• Demand for hay from local dairy farmers and feed mills continues to increase.
• Increased demand for hay from drought affected areas in Northern NSW and QLD is causing increased competition for hay in Northern Victoria. Cereal hay is of particular interest to these buyers.
• Cereal hay prices are fluctuating due to the strong competition. Supply is good at present but will become tighter in winter.
• Lucerne hay production is active through North Central Victoria with irrigated crops reporting their 4^th or 5^th cut for the season. Prices continue to increase, now trading around $280-$300/t on farm.
• Protein hay (lucerne and vetch) is in tight supply with much of the hay in storage already under contract. Buyers from Northern Australia are active at the moment creating strong competition for local buyers.
• There are good supplies of straw locally and demand is slow. Straw will become more sought after in winter this year as cereal hay becomes more difficult to source.

• Sale March rainfall: 24.2mm (Ave: 49.5mm).
• YTD: 60.4mm (Ave: 137.6mm), compared to 71mm this time last year.
• Gippsland received some very useful rain over the past week. East Gippsland had around 20mm on the Snowy River flats and helped non-watered paddocks. South and west Gippsland also had a good soaking of 20mm for most areas.
• SFW Wheat: $ +10 ($317 to $327). Wheat prices continue to run away. This movement follows the continuing uncertainty in Crimea and how this may affect wheat security and movements out of the Black Sea.
• Barley: $ +5 ($290 to $300). Barley prices are up on improved exporter bids in port areas with enough supplies to fill vessels. This includes Melbourne and Geelong port zones.
• Triticale: $ +0 ($297 to $307). Triticale prices are steady at present. However, it is expected that we won’t see triticale equal or less than the feed barley price. Very little triticale has been trading over the past six weeks.
• Feed Oats: $ +5 ($243 to $253). Demand is coming from graziers gathering feed oats for filling farm silos. There are thoughts that the demand from New South Wales this winter will see the prices firm.

• Demand for hay from non-irrigated regions is picking up. All types of hay are in demand but high quality hay is most sought after.
• Demand for cereal hay has picked up from dairy farmers preparing for autumn calving and building up fodder reserves for winter. Prices remain steady at present but demand from Northern buyers is putting pressure on cereal hay supplies in Northern Victoria. This will impact prices in the coming weeks.
• The supply of lucerne hay is largely hand to mouth at this stage. We expect lucerne hay prices to start to increase in coming weeks as supply tightens further. Vetch is difficult to source, where it can be found quality is variable.
• Demand for pasture hay has also picked up with price rises this week reflecting the increased interest. Pasture hay is now trading for around $200-220/t.
• Some straw is available in Gippsland but quality is variable. Gippsland buyers seeking straw are advised to look to North Central and Western Victoria at this stage.

• Port Fairy March rainfall: 20.2mm (Ave: 37.8mm).
• YTD: 46.6mm (Ave: 104mm), compared to 37.6mm this time last year.
• There was only light rain this week through the west coast dairy areas. Coastal areas had around 12mm but central areas such as Camperdown and Colac only received 3mm.
• SFW1 Wheat: $ +10 ($278 to $288). Wheat prices continue to run away. This movement follows the continuing uncertainty in Crimea and how this may affect wheat security and movements out of the Black Sea.
• Feed Barley: $ +5 ($245 to $255). Barley prices are up on improved exporter bids in port areas with enough supplies to fill vessels. This includes Melbourne and Geelong port zones.
• Triticale $ +0 ($258 to $268). Triticale prices are steady at present. However, it is expected that we won’t see triticale equal or less than the feed barley price. Very little triticale has been trading over the past six weeks.
• Feed oats $ +5 ($234 to $244). Demand is coming from graziers gathering feed oats for filling farm silos. There are thoughts that the demand from New South Wales this winter will see the prices firm.
• Some summer sown dodder crops are being strip grazed. Early preparations for winter cropping programs on non-dairy farms have begun.

• Demand remains steady from the dairy industry, with interest in high protein hay such as lucerne still strong.
• There are good stocks of cereal hay still available but quality is variable. Supplies may come under pressure later in the year with ongoing demand from Northern Australia. Price rises in the coming months are expected.
• Lucerne hay is sought after and becoming harder to source. Prices remain steady at this stage but are likely to increase in the coming months.
• Vetch and clover hay are still moving into South West Victoria. Vetch is difficult to source and clover hay is also in limited supply.
• Pasture hay is in good supply but variable quality. Good quality pasture hay for trading may be difficult to source this year.
• There is plenty of straw available and quality is good.

• Mount Gambier March rainfall: 12.8mm (Ave: 35.2mm).
• YTD: 63mm (Ave: 87.6mm), compared to 29.6mm this time last year.
• Mount Gambier had a very useful 16mm of rain this week.
• Wheat $ +8 ($295 to $305). Wheat prices continue to climb on the back of uncertainty in Crimea and how this situation may impact wheat security and movements out of the Black Sea.
• Feed barley $ +4 ($268 to $278). Feed barley prices are up as exporters seek to accumulate tonnages to be exported out of either Portland or Port Adelaide.
• Triticale $ +0 ($270 to $280). Triticale is not trading at this time but prices will be adjusted to prevent triticale falling below barley prices.
• Oats $ +5 ($227 to $237). Demand is coming from South Australian graziers who are steadily filling silos with feed oats, from which wheat or barley have been delivered.

• Demand for hay is slowly picking up, typical for this time of year. Buyers are seeking higher grade hay such as lucerne and there is also some demand for straw.
• Enquiries for good quality pasture/clover hay and cereal hay are now starting to come from the drought affected regions in Northern Australia. Generally the supply of quality pasture hay is low.
• Cereal hay is available but quality is variable. Demand from the north is expected to put pressure on supplies in the southern markets later in the year and prices will increase as a result.
• Demand for lucerne hay is starting to pick up with reports that hay is moving to Queensland from the Keith region. Locally supplies are lower than average. Demand from outside the region will put pressure on the local market later in the year.
• Lucerne hay prices are firm and growers are not willing to negotiate on price due to limited supply. Buyers seeking lucerne or vetch hay should do so as soon as possible. Prices will only increase in the coming weeks and months as supply diminishes.
• After a big yielding season many local growers have filled empty hay sheds with pasture hay for their own use. Quality is variable. It is unlikely there will be high volumes of good quality pasture hay available for trading later in the year.
• Straw is available and quality is generally good.

• Murray Bridge March rainfall: 11.4mm (Ave: 20.4mm).
• YTD: 101.6mm (Ave: 53.3mm), compared to 32mm this time last year.
• It has now been 5 weeks since the heavy rains that caused flooding in this part of South Australia and mostly dry since then. There has been some rain in the past two weeks. Murray Bridge received 3mm this week.
• Wheat $ +6 ($265 to $275). Wheat prices are up again as the political situation in the Ukraine and Crimea plays itself out. This will bring uncertainty about world wheat security in general and movements of wheat through the Black Sea ports.
• Feed barley $ +3 ($243 to $253). With shipping programs in place for the coming months, there is not the strong demand to secure additional tonnage that there is in some of the other port zones of southern Australia.
• Triticale $ +0 ($250 to $260). Triticale is not trading at this time but prices will be adjusted to prevent triticale falling below barley prices.
• Feed Oats $ +5 ($188 to $198). Demand is coming from South Australian graziers who are steadily filling silos with feed oats, from which wheat or barley have been delivered.

• Demand for hay on the domestic market is starting to pick up with hay moving as far as Northern NSW and Queensland.
• Cereal hay supplies are good but quality is variable. With the degree of interest from northern buyers seeking cereal hay it is expected prices will rise in the coming weeks.
• The Northern Territory is drawing hay out of Central SA, due to a shortage of hay and local production not due to start until April. Pellet mills are the most active buyers.
• Supplies of protein hay (medic and vetch) are low and may be difficult to source later in the year.
• Straw quality has been high and supply is good.
• Prices remain unchanged this week.

• Bunbury March rainfall: 0mm (Ave: 15.5mm).
• YTD: 0.4mm (Ave: 34mm), Compared to 24.6mm this time last year.
• No rain through the south west dairy areas of cropping areas this week. The weather is getting cooler but still dry.
• Wheat $ +3 ($315 to $325). A very modest rise in wheat prices even after the $10 a tonne increase last week. This is out of kilter with the rest of Australia. If the uncertainty surrounding the Ukraine continues, expect the Perth and southwest wheat prices to rise.
• Barley $ -3 ($287 to $397). The West Australian market is different to other Australian market centres. This is due to its large production and small domestic use. This explains why the feed barley price has declined here, in the opposite direction to the rest of Australia.
• Triticale $ +5 ($280 to $290). Triticale prices are up to preserve a positive margin over feed barley. There is still only one main buyer with a published, Perth based buying price.
• Oats $ +10 ($200 to $210). Feed oats have lagged behind other grains for some time. Prices were adjusted this week as the discrepancy became too great.

• Hay trading on the domestic market is increasing with particular interest in high grade hay. Dry conditions are driving the increased demand.
• Cereal hay supplies are good due to high yields in the 2013 season. Quality is variable.
• There is steady demand for cereal hay into the livestock and dairy markets at this stage due to the dry conditions.
• The lucerne hay market is hand to mouth at present, prices remain firm.
• Pasture hay and silage production was down in 2013, after a wet start to spring resulted in a short baling window. Quality of pasture hay was high due to favourable conditions at baling.
• Straw bailing is now complete with production above average. There is limited demand for straw from the domestic livestock and dairy market at present but pellet mills are active buyers.

• Smithton March rainfall: 16.6mm (Ave: 50.8mm).
• YTD: 86.4mm (Ave: 124.9mm), Compared to 41.8 mm this time last year.
• Midlands received two to three millimetres in the Midlands. But the north west coast had 10 to 12 millimetres.
• Wheat $ +10 ($360 to $370). Mainland wheat prices continue to rise sharply. This movement follows the continuing uncertainty on the Crimean Peninsula and how this may impact world wheat security and movements out of the Black Sea ports.
• Feed barley $ +5 ($330 to $340). Most feed barley trades are for Tasmanian barley. Midland harvest is mostly finished. North coast crops could not be sown until much later. Mainland merchants report that there is little business being done for either wheat or barley at this time.
• Triticale prices $ +5 ($333 to $343). There is no mainland triticale trading at this time but is being priced at this level to remain higher than feed barley.
• Oats prices $ +5 ($313 to $323). Demand is coming from mainland graziers who are steadily filling silos with feed oats, from which wheat or barley have been delivered.
• Northern wheat and barley crops are currently being stripped. Rain restricted some of the headers.

• Conditions are drying off and demand has picked up from the dairy sector.
• There is particular interest in good quality lucerne and oaten hay.
• Cereal hay supplies are low and prices are around $180-$200/t on farm.
• Lucerne supplies are low and demand is steady. Anyone seeking lucerne hay is advised to secure their requirements now for later in the year. Prices are around $260-$280/t on farm.
• The supply of pasture hay is good and some hay is trading. Quality is variable due to the patchy weather conditions during the hay season.