Grain – Hay Report – 4 April 2014

International & National Summary – Grain:

• International values were relatively unchanged throughout the week with the much-anticipated USDA quarterly stocks and planting report having minimal impact. Historically this report has caused severe volatility; as it tends to differ greatly form the trade’s expectations. This year the published results were inline with the markets beliefs and had a neutral effect on global wheat prices. CBOT May wheat futures fell A$11/t to finish A$276/t on Tuesday night. The slight decline in international wheat values was heavily exasperated by a rising Australian dollar. The Aussie dollar gained 1.47USc to close at 92.72Usc.
• Crop conditions across the globe are the firm focus and the predominant factor that will drive international markets in the coming months. US winter wheat regions remain dry and are desperately seeking rain if they hope to maintain average yields. The dry conditions are currently aiding Australian prices. Rainfall is increasingly important in the coming weeks, as the spring period is a key growth period for the US winter wheat crop.
• In the Black Sea region the Ukraine crisis has subsided as Russia reduced their military presence with business seemingly commencing as usual. The global market has averted their attention from the political turmoil and is instead focusing on fundamentals including planting progress throughout Russia and local crop conditions. This saw the market drop off as it reclaimed the gains the Ukraine crisis caused initially.
• The slight fall in international values was intensified domestically with a number of local factors causing prices to ease. Recent rainfalls throughout Northern Australia have softened demand and brought back prices. The rain was widespread and will give growers confidence coming into planting. The rain was welcome news for consumers with price relief for feed well overdue. The rain has also caused damage to the incoming Sorghum crop with large proportions now expected to graded SOR2 or lower. This should see larger quantities enter the feed market, as it will not be fit for export. Little sorghum is entering the bulk handling system and any purchases will have to be executed ex-farm. Remain vigilant around quality checks and ensure you are purchasing what you intend to.
• Similarly in the southern states rainfall throughout the last week has seen feed grain values come under pressure. Confidence in the new season garnered from the recent rains has seen many growers willing sellers of old crop. The increase supply has been met with limited demand. Much of the Trade have covered their requirements with no need for aggressive grain acquisition. If further rains are experienced towards the end of the month expect a steep decline in prices and potentially the opportunity to pick up remaining grain requirements at cheaper values.

National Summary – Hay:

• Trading of hay has continued at a steady pace in most regions this week.
• Despite good rain, growers in drought affected regions are still trying to source feed to hold them over until paddock feed becomes available.
• In some regions, particularly the New England of NSW, this rain may be too late as cooling ground temperatures could restrict pasture growth. These buyers are actively trying to secure winter feed from the Northern NSW Coast and Southern regions.
• The Burrambuttock to Bourke hay drive is on again this weekend with some 50 loads of hay expected to arrive in Bourke on Saturday. This hay will assist drought affected livestock producers in Western NSW.
• Rain has stopped lucerne hay production for many producers in irrigated regions of Victoria and NSW. With the lucerne hay market already hand to mouth it is likely that supplies will be very tight in winter.

Northern Australia:

• Hay supplies remain tight with supplies being sourced from Victoria and South Australia to meet demand. Feedlots are active buyers.
• Due to good rain some growers should be able to plant their cereal crops for grazing and/or fodder in the coming weeks.

Southern Australia:

• Trading remains fairly steady this week. Demand from Northern buyers continues to generate competition in the south. Local demand however is slow.
• Protein hay will be short in 2014. Recent rain will add to this, slowing lucerne production in the coming weeks.
• The summer crop (maize, millet and sorghum) silage harvest currently underway.
• There are good supplies of low grade hay available, likely to be available throughout the winter.

Western Australia:

• Demand for cereal hay and lucerne from dairy farmers and livestock producers remains steady in the South West.
• There are good supplies of cereal hay from the 2013 harvest, however quality is variable.
• Straw supplies are well above average and quality is good.

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 April rainfall: 0mm (Ave: 42.3mm).
• YTD: 315.2mm (Ave: 707mm). This time last year the tablelands had received 555.6mm.
• Only five millimetres of rain this week across the tablelands but March received totals of over 50mm. Sown crops are still doing well, even where they are not irrigated.
• Rain has reduced the concerns of grain security in the tablelands.
• Wheat: $ +3 ($403 to $413). Wheat prices are still going up despite the long awaited rains coming to Central Queensland. The key factor driving these prices is that there is little feed grade wheat available. Therefore, end users are required to pay inflated prices for higher grade, human consumption wheat.
• Barley: $ +7 ($487 to $497). Barley prices are trading at a large premium to wheat.
• Corn prices $ +5 ($360 to $370). Dryland corn was being sown up until the 20^th of March in Central Queensland based on the attractive forward prices. This could mean fresh supply as early as August.
• Sorghum: $ -5 ($347 to $357). Prices are down after drought breaking rains throughout Central Queensland. It is expected that some sorghum will be sown on these rains, to get cash flow earlier than waiting for wheat to mature in September.
• Sowing is expected to take place in the next ten days for stripping in September.
• It is expected that frosts will prevent more sorghum from being sown in most areas of Central Queensland, particularly the southern Highlands.

• There has been decent rainfall in the past 2 months, easing local demand for hay slightly.
• Despite more widespread rain across QLD this week demand remains steady. Feedlots are active buyers.
• Hay supplies are very low at present. Supplies will not be replenished until the drier weather sets in.
• Prices remain unchanged this week.

• Toowoomba April Rainfall: 0mm (Ave: 29.7mm).
• YTD: 214mm (Ave: 323.9mm), compared to 743.8mm last year.
• A massive 60 to 160 millimetres of rain has been received over the Downs in the past 10 days. There was some localised flooding around Pittsworth.
• Wheat: $ -4 ($379 to $389). The rain has secured the incoming winter crop sowings. It is expected that growers will aim to have crop stripped early so as to reap the current high prices. Once the supply enters the market, feed wheat prices will be brought back to export parity.
• Feed Barley: $ +7 ($373 to $383). Barley is trading a small discount to wheat. Some demand is still coming from feedlots buying for winter use.
• Corn $ +10 ($417 to $427). Trade believes there is a looming feed corn shortage as there was twelve months ago. There have been some early March dryland sowings in attempt to fill the calculated mid year and early spring demand.
• Sorghum: $ -19 ($317 to $327). The general rain in southeast Queensland will allow flagging crops to revive and to produce some harvestable grain. More now than any prospects prior to the rain.
• Winter cropping season is now secure, provided growers have a period when soils have drained enough to allow for sowing.
• The sorghum harvest is being strung out until August. Ripe grain heads will rely on heavy frosts to dry out seed heads prior to harvest.

• Despite good rainfall across the region, demand for hay remains steady and will continue to do so until paddock feed becomes available in the next 4-6 weeks.
• Local supplies of hay remain low. Fodder is still being sourced from Victoria and South Australia to meet demand.
• Rain will benefit growers wanting to plant cereal crops for hay in the coming weeks. If conditions throughout winter are favourable, cereal hay will become available locally in July or August.
• Lucerne hay remains difficult to source and prices are firm but steady. Supplies of protein hay are hand to mouth right across the country and the rain this week has stopped baling for lucerne growers in Victoria and NSW this week. Supply of protein hay will remain tight through winter.
• Prices remain unchanged this week and are expected to remain steady for the coming weeks.

• Lismore April rainfall total: 1.6mm (Ave: 140.2mm).
• YTD: 312.6mm (Ave: 598.3mm), compared to 716.4mm this time last year.
• Northern Rivers has had 100 to 200 millimetres of rain over the past week. With all the rain since January, any local sorghum crops will have made great progress. Crops may have difficulty drying down without the benefit of winter frosts in this region.
• SFW Wheat: $ -4 ($391 to $401). The rain has secured the incoming winter crop sowings. It is expected that growers will aim to have crop stripped early so as to reap the current high prices. Once the supply enters the market around September, feed wheat prices will be brought back to export parity.
• Feed Barley: $ +7 ($395 to $405). Barley is trading a small discount to wheat. Some demand is still coming from feedlots buying for winter use.
• Corn $ +10 ($382 to $392). Trade believes there is a looming feed corn shortage as there was twelve months ago. There have been some early March dryland sowings in southern Queensland; in an attempt to fill the calculated mid year and early spring demand.
• Sorghum: $ -19 ($333 to $343). The general rain in southeast Queensland will allow flagging crops to revive and to produce some harvestable grain. More now than any prospects prior to the rain.

• After good rain there was a slight dip in demand last week. However the market has firmed this week, with good paddock growth still a while away. Livestock producers, dairy farmers and hobby farmers are all active buyers.
• Livestock producers from the New England region have become active buyers, looking to source higher grade hay and silage from the coast. These buyers are now concerned for their winter supply of hay and are trying to build their stocks.
• All hay supplies are low, due to decreased yields and steady demand. Buyers continue to source hay from Victoria and South Australia to meet demand.
• Straw supplies are also low.

• Forbes April rainfall: 0.2mm (Ave: 20.2mm).
• YTD: 235.8mm (Ave: 147.1mm), compared to 162.6mm this time last year.
• A drought breaking rain came last week to the Central West, with Forbes receiving 39 millimetres. The timing was right and gypsum is now being spread before canola is sown later this month.
• This is only the first rain after a very dry summer, so many more rains will be needed. But this one rain has revived growers’ spirits and they will seed canola in April and wheat in May.
• SFW Wheat: $ -3 ($278 to $288). Buyers are now getting more aligned with export values than has been the case for several months. The higher prices were due to north of the state being dry during their normal wet season.
• F1 Barley: $ -3 ($251 to $261). Feed barley is now back within the traditional discount to wheat.
• Corn $ +5 ($415 to $425). Corn prices are firming despite the rain as trade sources predict a supply shortage in the second half of this year, as there was last year.
• Sorghum $ -8 ($354 to $364). Price is higher if sorghum has to be trucked south from Gunnedah or around.

• Local demand from livestock producers has eased as more paddock feed is now available.
• Demand has continued to remain strong from hobby farmers, feed mills and Northern buyers, particularly for lucerne hay. Farmers in the New England and Southern Queensland regions remain the most 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. There is some variation in quality of lucerne hay available at present. Recent rain events will further impact on the quality of hay being baled in the coming weeks.
• Straw is in strong demand but this may ease slightly in the coming weeks after good rain across Northern NSW and Southern QLD.

• Bega April rainfall total: 0.4mm (Ave: 34.6mm).
• YTD: 150mm (Ave: 263.8mm), compared to 158mm this time last year.
• Bega has had 79 millimetres of rain this past week.
• SFW Wheat $ -6 ($289 to $399). Buyer bids are now getting more aligned to export values than has been the case for several months as the north of the state has been dry. Most of the wheat held in trucking range of Bega is of human consumption grade.
• Feed barley $ -6 ($262 to $272). Feed barley is now back within the traditional discount range to wheat.
• Triticale $ -5 ($276 to $286). Triticale is being prices between wheat and feed barley, but there is little (if any) currently trading. Growers and merchants are holding stock until winter.
• Oats: $ -5 ($265 to $275). Despite rainfalls across the state, it will take some time for feed to grow especially in northern grazing areas. This is supporting demand for grain oats. Nevertheless, there is now more oat sellers after this rain which has brought up supply.

• Demand remains steady.
• The supply of cereal hay in Southern NSW has been largely absorbed by the drought affected farmers in Northern Australia. Prices remain firm as supplies diminish and these Northern buyers remain active in the market.
• Supplies of lucerne hay are very low in most parts of eastern Australia, particularly in the dry land production areas. Growers with irrigation around the Griffith region have had to stop baling this week due to rain. The market for lucerne hay continues to be hand to mouth and tight supplies are forecast through winter.
• Supply and quality of new season straw is good. Demand remains steady at present from both dairy and livestock.
• Maize silage production was steady this year with good yields reported.

• Tatura April Rainfall total: 5.4mm (Avg: 34.1mm)
• YTD: 52mm (Ave: 137mm), compared to 88.7mm this time last year.
• In general terms, the irrigated northern plains of Victoria received a blanket rain last Thursday of around 25 millimetres. It was well received by croppers who now have more stored soil moisture for sowing.
• Wheat: $ -2 ($281 to $291). Wheat prices are down slightly from our last report. Exchange rate has been rising but increased exporter interest in wheat purchasers is supporting wheat prices.
• F1 Barley: $ -1 ($244 to $254). Feed barley is still at a heavy discount to wheat. Larger price drops were expected on the heavy New South Wales rains.
• Triticale: $ +0 ($255 to $265). No triticale is currently trading. Growers and merchants have the stock bedded down until winter.
• Feed Oats: $ +5 ($225 to $235). More sellers of feed oats now following Victorian and New South Wales rains. Minimum demand will still be coming from northern New South Wales where it is too late for summer feed production and frosts impede winter growth.

• Demand remains steady from buyers in drought affected Northern NSW and QLD. Cereal and lucerne hay are of particular interest to these buyers.
• Buyers from Gippsland are now starting to become more active, sourcing cereal hay from North Central Victoria. Cereal hay prices remain steady this week. Supply is good at present but will become tighter in winter.
• Lucerne hay production has stalled for many due to the rain.
• Protein hay (lucerne and vetch) is in tight supply with much of the hay baled in the past few weeks or in storage is already under contract. Buyers from Northern Australia and Gippsland are active, creating competition for local buyers.
• There are good supplies of straw locally and demand is slow.

• Sale April rainfall: 6mm (Ave: 48.3mm).
• YTD: 87.8mm (Ave: 185.9mm), compared to 99.4mm this time last year.
• Most of Gippsland has now had five weeks of effective rainfall.
• SFW Wheat: $ -2 ($315 to $325). International and domestic demand is still strong. Enough for prices to remain relatively steady against a firming Australian dollar worth 92 US cents.
• Barley: $ -3 ($287 to $397). Barley prices are trading at a discount of $28 to wheat.
• Triticale: $ +0 ($297 to $307). No triticale is currently trading. Growers and merchants have the stock bedded down until winter.
• Feed Oats: $ +5 ($243 to $253). More sellers of feed oats now in all Victorian districts but prices are steady. Prices are underpinned by continuing demand from northern New South Wales, as rain does not immediately produce feed.
• Winter cereals are being sown as paddock conditions allow from Traralgon to Bairnsdale. More canola seems set to be sown this month.

• Demand for hay from non-irrigated regions is picking up. All types of hay are in demand but higher quality hays are most sought after.
• Demand for cereal hay remains steady this week as dairy farmers preparing for autumn calving look to build up fodder reserves. Prices remain steady at present.
• 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. Vetch is difficult to source, where it can be found quality is variable.
• Demand for pasture hay remains steady after picking up slightly last week.
• 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 April rainfall: 4.8mm (Ave: 51.4mm).
• YTD: 87.6mm (Ave: 155.4mm), compared to 62mm this time last year.
• Western Victoria has had a dry summer and autumn. There has been some good rainfalls bit many gaps in other weeks. Cropping plans are being deferred until the soil moisture improves and it will be easier to till.
• SFW1 Wheat: $ -2 ($276 to $286). As the Australian dollar firms to 92 US cents, it becomes more difficult for exporters. This is because prices are lower when converted back to Australian dollars. However the strong world demand for wheat has been enough to limit the falls.
• Feed Barley: $ -3 ($242 to $252). Barley is trading at a discount of $34 to wheat.
• Triticale $ +0 ($258 to $268). No triticale is currently trading. Growers and merchants have the stock bedded down until winter. Very little triticale is now grown in the Western District.
• Feed oats $ +0 ($234 to $244). More sellers of feed oats now in all Victorian districts but prices are steady. Prices are underpinned by continuing demand from northern New South Wales, as rain does not immediately produce feed.

• Demand remains steady from the dairy industry, with good quality high protein hay most sought after.
• There are good stocks of cereal hay still available but quality is variable. Local demand is steady.
• Lucerne hay is becoming harder to source in Victoria, but there are still good supplies in South East South Australia. Prices remain steady at this stage but are likely to increase in the coming months.
• Vetch has also been in strong demand and is difficult to source unless it was secured earlier in the year.
• Pasture hay is in good supply but quality is variable. Good quality pasture hay for trading may be difficult to source this year.
• Straw is available and quality is good.

• Mount Gambier April rainfall: 2.6mm (Ave: 54.7mm).
• YTD: 93.8mm (Ave: 142.3mm), compared to 55.2mm this time last year.
• Another two weeks of dry conditions with only five millimetres in Mount Gambier.
• Wheat $ +1 ($296 to $306). Considering the Australian dollar is now worth 92 US cents, wheat prices have been remarkably resilient. East coast prices are lower due to significant rains in drought areas bringing domestic prices closer to exporter bids. But this region has been and still is driven by the exporter market.
• Feed barley $ +0 ($268 to $278). Feed barley prices are holding quite well at values $30 a tonne over the prices at harvest time. This price has nothing to do with the north eastern drought. It is purely driven by exporter demand for the commodity out of one of the South Australian ports.
• Triticale $ +5 ($275 to $285). There hasn’t been any new trading of triticale. There will be more interest when grazing conditions get cold and wet.
• Oats $ +0 ($227 to $237). Feed oat prices are still steady.
• It is worth noting that port prices for both wheat and barley are $30 a tonne higher for Portland than for Port Adelaide.

• Demand for hay remains quite slow locally. Most livestock producers and dairy farmers have been relying on irrigation rather than buying hay.
• Demand for fodder is not expected to pick up until the temperatures cool off in the coming months.
• Cereal hay is available but quality is variable. Prices firmed slightly this week to $180-$200/t, up $15.
• Demand for lucerne hay is steady at present. Prices have remained stable for the past few weeks at around $300-$320/t delivered locally.
• After a big yielding season many local growers have filled empty hay sheds with pasture hay for their own use. Quality is variable. At this stage 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 April rainfall: 1mm (Ave: 28.6mm).
• YTD: 107.4mm (Ave: 81.9mm), compared to 35mm this time last year.
• IT has been two weeks since the last report for this region and the area remains extremely dry. There has only been 5mm received in the period.
• Wheat $ +1 ($266 to $276). Despite the Australian dollar increasing again this week to slightly over 92USc the wheat price is being surprisingly resilient. Prices have dropped in other areas due to recent rains but the dependence on exports throughout SA is seeing prices hold.
• Feed barley $ +0 ($243 to $253). Feed barley prices are holding quite well currently sitting about $30 above values experienced at harvest time. This is purely driven out of demand from the export market.
• Triticale $ +5 ($255 to $265). There has been slow trading of triticale produced and stored in the areas north and east of Adelaide. Most demand will come when grazing conditions deteriorate in winter.
• Feed Oats $ +0 ($183 to $193). Feed oat prices are still steady.

• Demand for hay on the domestic market has eased slightly, with interest from the Northern Territory and North Eastern Australia slowing a little after good rain this week.
• Cereal hay supplies are good but quality is variable.
• The Northern Territory is drawing hay out of Central SA, due to a shortage of local hay. Pellet mills and feedlots are the most active buyers.
• Supplies of protein hay (medic and vetch) are low and may be difficult to source later in the year. Demand from dairy farmers on the Fleurieu Peninsula has started to ease as good paddock feed is now available.
• Straw quality has been high and supply is good.
• Prices remain steady this week.

• Bunbury April rainfall: 0mm (Ave: 35.3mm).
• YTD: 11mm (Ave: 69.3mm), Compared to 39.6mm this time last year.
• Rain experienced throughout the region was between 7-10 mm. There are further forecasted fronts over the weekend, which would be extremely beneficial for upcoming planting.
• Wheat $ +0 ($315 to $325). There wasn’t the heavy downside seen in WA wheat values that the East Coast experienced. Export demand has remained constant maintaining current values.
• Barley $ +1 ($287 to $397). Good demand for feed barley out of the ports has seen prices remain constant.
• Triticale $ -2 ($280 to $290). Reports of key triticale buyers having filled current requirements. It is not a market traditionally with enormous depth so this could see prices drop off.
• Oats $ +0 ($200 to $210). Very little trade activity for feed oats. Prices are relatively unchanged.

• Hay trading on the domestic market is increasing with particular interest in high grade hay. Limited paddock feed and dry conditions are driving the increased demand.
• There is steady demand for cereal hay into the livestock and dairy markets. Supplies are good this year and prices should remain steady in the short term.
• The lucerne hay market is hand to mouth at present. The quality of 2013 /2014 lucerne hay is variable due to hot dry baling conditions.
• Straw production was above average this year. Pellet mills are active buyers.

• Smithton April rainfall: 6.6mm (Ave: 59.8mm).
• YTD: 124mm (Ave: 184.7mm), Compared to 95.4mm this time last year.
• Rain this week was extremely heavy and seemed to be fairly scattered over the region. 73mm fell at Sheffield while Wynyard only got 20mm.
• Wheat $ -2 ($358 to $368). Grain stripping through the north has concluded. Wheat prices are down on the back of rains across key growing areas in Victoria. This has increased supply to the market as growers are now confident of the planting the new crop and are willing to offload any remaining grain.
• Feed barley $ -3 ($327 to $337). Following Melbourne port prices, values have dropped this week.
• Triticale prices $ +0 ($338 to $348). There is no mainland triticale trading at this time but is being priced at this level to remain higher than feed barley.
• Oats prices $ +0 ($313 to $323). Demand is coming from mainland graziers who are steadily filling silos with feed oats, from which wheat or barley has been delivered.
• Heavy rains throughout the week could see any unstripped grain downgraded to feed grades.

• The hay market remains fairly steady this week. There is interest in good quality lucerne, silage and oaten hay. Dairy farmers are the most active buyers.
• Good rain over this week may see the demand for hay ease in the coming weeks.
• Cereal hay supplies are low and quality is variable.
• Lucerne supplies are low.
• 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.
• There is some straw available in the Northern midlands. Dairy farmers and feedlots are the most active buyers.