Grain – Hay Report – 11 April 2014

International & National Summary – Grain:

• Market attention is firmly focused on weather activity across the globe with particular attention on the condition of the US winter wheat. International values eased off this week on the back of promising weather forecasts on the US southern plains. CBOT May wheat futures fell A$8/t to finish at A$268/t on Tuesday night. The Australian dollar was relatively unchanged over the week having little bearing on domestic values. Our currency closed on Tuesday night on 92.67USc.
• Agri traders will avert attention on the USDA national crop progress reports released on a weekly basis as of this week. The first report since the US winter wheat crop emerged from dormancy was released last night and put the percentage of wheat in the good-excellent rating at the lowest level in ten years. Significant production areas including Kansas, Texas and Oklahoma all had their current crop quality reduced. There is still sufficient time in the growing period for these crops to recover but the potential for reduced supply from these regions could firm international wheat values.
• The South American and Australian planting period is to commence shortly. Any significant weather updates within these key regions will flow onto international price movements.
• Despite softer futures markets this week, domestic basis firmed as Australian export pace continues to sustain domestic prices above international values. The export demand has been maintained longer than analysts initially predicted and the belief that prices will drop off when exporters cover existing sales of old crop remains.
• Prices in northern Australia found ground after originally showing losses in response to recent rains. The rain gave confidence to growers for the upcoming planting season within Queensland and northern New South Wales but the extremely tight balance sheet still remains. Expect feed grain prices to maintain current values until there is a reasonable level of certainty around this year’s production. Given that there will be no carry out stocks at all in northern Australia any production issues could see the minimal difference in price between grades continue well into the year.
• Feed barley dropped off in both Victoria and South Australia this week as recent rain saw many growers become willing sellers. The increased confidence in new crop planting saw old crop sales being finalized. Despite heavily booked shipping stems in the coming month it appears the trade already has comfortable coverage. This dip in price may present an opportunity for end users to sure up required supplies without competing with key export merchants. Wheat is maintaining strong values but the market depth is waning. Post planting period may see an influx of growers willing to sell and a potential opportunity to secure grain below current values. Majority of remaining stocks are stored on farm so continue to be vigilant around quality testing.

National Summary – Hay:

• The hay market remained steady this week. Increased buyer confidence in the season ahead after the recent rain, particularly in Eastern Australia has taken some pressure off the hay market.
• Prices remain firm this week but there may be some softening of cereal hay prices in the coming weeks following the widespread rains.
• Predictions of an El Nino event are leading to speculation that hay supplies in Eastern Australia may come under further pressure later in the year. With stocks already low buyers should be mindful of this and start securing their hay requirements now for later in the year.

Northern Australia:

• Sowing cereals for winter feed has commenced. Oat and barley seed are in short supply and is causing some issue for growers.
• Hay supplies remain tight with supplies being sourced from Victoria and South Australia to meet demand. Feedlots and dairies remain the most active buyers.
• Summer silage yields are well done on 2013 due to the dry growing conditions. Feedlots are active buyers for fresh chopped maize silage.

Southern Australia:

• Demand from Northern buyers continues. Supplies of cereal hay may come under pressure as a result.
• Local demand for cereal hay has eased but demand for lucerne hay remains steady.
• Protein hay will be short in 2014. Recent rains will add to this, slowing lucerne production and impacting the quality of hay made in the most recent cut.
• There are good supplies of low grade hay available. This is 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.
• Lucerne hay supplies are very low and will be short throughout winter.
• Pasture hay and silage are in short supply following a long hot summer.
• 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 556.6mm.
• It has been a dry two weeks across the Tablelands, with only 7 millimetres recorded over that period. Dryland acres are going well on the back of heavy rains in March. Plus, the minimal rain is allowing cropping soils to dry out for sowing.
• Winter prospects for crops improved by the recent rains, but more will be needed at the end of the growing season for crops to finish on.
• Wheat: $ +3 ($406 to $416). All old crop wheat in Central Queensland is of human consumption quality. This is pushing prices up.
• Barley: $ -6 ($481 to $491). Prices are down this week but still include the massive road freight up from the Darling Downs.
• Corn prices $ +0 ($360 to $370). Corn prices are based on local Tableland prices from local produce.
• Sorghum: $ +5 ($352 to $362). Late season stripping from July and August will provide better yields than estimated earlier. Some of this supply may be trucked to southern Queensland and not exported.

• There has been decent rainfall in the past 2 months, easing local demand for hay slightly.
• Western QLD remains dry and cattle stations are still seeking hay. Feedlots are also active buyers.
• Hay supplies are very low at present. Local supplies will not be replenished until drier weather sets in.
• Prices remain unchanged this week.

• Toowoomba April Rainfall: 0mm (Ave: 29.7mm).
• YTD: 214mm (Ave: 323.9mm), compared to 752.4mm last year.
• Some light rain throughout the cropping areas and the grazing country of southeast Queensland.
• Crop prospects are quite good now. Soils are currently wet enough and there will enough moisture for crops, when sown, to germinate. However, harvest of winter crops is a long way off.
• Wheat: $ -7 ($372 to $382). The prospects have improved for the wheat crop, in both sowing and early growth. Domestic prices are easing back closer to the levels from exporter buying interest. Most major domestic flourmills have tonnage covered, in preparation for the drought extending into late autumn and winter. However, winter crops will be sown on time and into moist seedbeds.
• Feed Barley: $ -6 ($367 to $377). There is still some demand from feedlots for barley that has not yet been covered. But with the recent rains, operators seem to be in no real rush to price any uncovered tonnage. Barley market may drift lower; possibly back to $20 below wheat prices.
• Corn $ +0 ($417 to $427). Feed corn is trading at a premium to both wheat and sorghum.
• Sorghum: $ +7 ($324 to $334). It is expected that the sorghum harvest is going to be long and drawn out in southern and central Queensland, on the back of the late sowing. Plus the crop relies on frosts to dry down the grain to 13.5% maximum grain moisture.
• Wheat and barley prices are lower as holders of both of these commodities seek to liquidate them, as the best prospects of further price rises have passed.

• Local supplies of hay remain low and demand has eased slightly following the rain in the past few weeks, mostly for cereal hay. Buyers are seeking cheaper roughage alternatives until paddock feed becomes available.
• Following rain in the past few weeks growers have started planting cereal crops intentioned for hay. Oat and barley seed is in short supply and sourcing it has been an issue for some growers.
• Cereal hay demand has eased slightly. Feedlots remain active buyers. Prices remain steady this week but may ease in the coming weeks as demand slows.
• Lucerne hay remains difficult to source and prices are firm this week. Supply of protein hay will remain tight through winter.
• Straw is currently very difficult to source. This has led to interest in baling sorghum stubble, although rain has slowed harvest for some growers.
• Summer crop harvest is well underway. Feedlots and dairies have been actively buying silage behind the chopper. Buyers are reported to be paying up to $350/t for maize silage on farm.
• With predictions of an El Nino in 2014 buyers are well advised to produce or secure hay supplies and silage where they can now for later in the year.
• Prices remain unchanged this week and are expected to remain steady for the coming weeks.

• Lismore April rainfall total: 8mm (Ave: 140.2mm).
• YTD: 319mm (Ave: 598.3mm), compared to 742.4mm this time last year.
• Just five to thirty millimetres on northern rivers areas this past week. There were more substantial rains in key centres of the mid north coast.
• SFW Wheat: $ -7 ($392 to $402). The prospects have improved for the wheat crop, in both sowing and early growth. Domestic prices are easing back closer to the levels from exporter buying interest. Most major domestic flourmills have tonnage covered, in preparation for the drought extending into late autumn and winter. However, winter crops will be sown on time and into moist seedbeds.
• Feed Barley: $ -6 ($383 to $393). There is still some demand from feedlots for barley that has not yet been covered. But with the recent rains, operators seem to be in no real rush to price any uncovered tonnage. Barley market may drift lower; possibly back to $20 below wheat prices.
• Corn $ +0 ($372 to $382). Feed corn is trading close to wheat and sorghum prices. Pricing is based on local coastal crops.
• Sorghum: $ +7 ($359 to $369). It is expected that the sorghum harvest is going to be long and drawn out in southern and central Queensland, on the back of the late sowing. Plus the crop relies on frosts to dry down the grain to 13.5% maximum grain moisture.

• Demand remains steady as buyers try to secure hay supplies for winter. Despite good rain in the past few weeks it may be too late for good pasture growth before soil temperatures drop in some areas.
• Livestock producers from the New England region remain active buyers, looking to source higher grade hay and silage from the coast.
• All hay supplies are low, due to decreased yields and steady demand. Buyers continue to source cereal and lucerne hay from Victoria and South Australia to meet demand.
• Sowing cereal crops for fodder and forage has commenced. Oat and barley seed is becoming difficult to source and causing issue for some growers.
• Lucerne hay is still in demand with reports of buyers paying $500-$600/t landed to the North Coast of NSW.
• Pasture hay production, mainly Rhodes grass, is underway again after the rain. Bulk hay is around $250-$300/t delivered locally and small squares are trading up to $16/ bale for higher grade hay.
• Straw supplies are low there is still interest in baling sorghum and soybean stubble for roughage through winter.
• With reports of an El Nino in 2014 buyers are well advised to produce or secure hay supplies and silage where they can now for later in the year.

• Forbes April rainfall: 29.8mm (Ave: 20.2mm).
• YTD: 265.4mm (Ave: 147.1mm), compared to 162.6mm this time last year.
• After heavy opening rains three weeks ago of 39 millimetres, another 29 millimetres has fallen this past week. Perfect timing and excellent amount!
• Rain has encouraged growers to seed canola around Easter or soon after, depending on when they can safely get machinery into the paddocks.
• Some farmers have declared it the best opening to a winter season for a decade.
• SFW Wheat: $ -6 ($272 to $282). Very good prospects for all winter crops in this region after very good and timely opening rains. Both growers and traders that are holding grain seem keen to cash in. Many believe that the highest wheat prices are now behind them.
• F1 Barley: $ +6 ($257 to $267). Interest in barley from domestic stockfeed buyers is increasing. The price relative to wheat is bouncing around at the moment. But it is expected to settle around $20 a tonne below feed wheat prices.
• Corn $ +0 ($415 to $425). Corn prices are trading at a massive premium to wheat and sorghum. The perceived shortage of feed corn has more to do with speciality markets, such as horse feeds, some of which are exported.
• Sorghum $ +4 ($358 to $368). These prices are based on sorghum being trucked from Liverpool Plains or further north. Local sorghum, if any, would be cheaper as there would be less road freight to pay.

• Local demand from livestock producers has eased as paddock feed is now available.
• Demand remains steady 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 in NSW 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.
• Pasture hay is difficult to source and quality is variable.
• Straw is in strong demand.
• With reports of an El Nino in 2014 buyers are well advised to produce or secure hay supplies and silage where they can now for later in the year.

• Bega April rainfall total: 72.8mm (Ave: 34.6mm).
• YTD: 222.4mm (Ave: 263.8mm), compared to 163mm this time last year.
• Another big week of rain following last week’s 79 millimetres. Both rain events were heavy and involved considerable run off. However, a lot of rain still soaked into the hill soils.
• SFW Wheat $ -5 ($284 to $394). Wheat prices continue to fall away. The domestic premium over exporter bids is all but gone. Exporter bids have been dragged down by the higher value of the Australian dollar.
• Feed barley $ +2 ($264 to $274). Barley is in stronger demand to go out of Victorian ports. Demand from the north has eased. Many northern feedlots still require tonnage but the heavy rains mean they are in no rush to cover their open positions.
• Triticale $ +3 ($279 to $289). There has been more interest in triticale purchases as winter approaches. Strong demand is coming from Victoria’s Western District where feed shortages are developing.
• Oats: $ +0 ($265 to $275). Demand for feed oats has eased on the back of several rain events through key cropping and livestock areas of New South Wales in recent weeks. However, there has been no price drop yet.

• Following good rain over the past few weeks paddock feed is now available and demand for fodder has eased.
• Sowing cereal crops for fodder and feed has commenced. Barley seed is difficult to source.
• Northern buyers continue to compete for hay from Southern NSW and Victoria.
• 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.
• Prices remain steady but unchanged this week.

• Tatura April Rainfall total: 45.8mm (Avg: 37mm)
• YTD: 99.4mm (Ave: 137mm), compared to 89.1mm this time last year.
• In general terms, it was a dry week throughout northern Victoria. Non-irrigated country is still brown and topsoils are dry.
• Nevertheless, some preparations for cropping are underway.
• Wheat: $ -4 ($277 to $287). The Australian dollar is currently valued at 92.58 US cents and holding consistently above 92 US cents. This is having a downward effect on grain prices in general, but more so on wheat and canola.
• F1 Barley: $ +0 ($245 to $255). It is expected that feed barley prices will stabilize, in order to bring the discount to wheat closer to the feed wheat price. At the current $32 a tonne, the discount is well outside the normal range of $20 to $25 a tonne.
• Triticale: $ +3 ($258 to $268). Sellers are starting to look at pricing their triticale as winter approaches. Generally, triticale is priced above feed barley but at a sufficient discount to wheat.
• Feed Oats: $ +0 ($225 to $235). Demand for feed oats has eased on the back of several rain events through key cropping and livestock areas of New South Wales in recent weeks. However, there has been no price drop yet.

• Demand has eased slightly this week and we expect to see prices come back just a little in the coming weeks.
• Buyers in drought affected Northern NSW and QLD are still sourcing cereal hay and lucerne from Northern Victoria.
• Buyers from Gippsland are still sourcing Lucerne from North Central Victoria but demand for cereal hay has dropped off.
• The latest cuts of lucerne hay may be of variable quality due to rain. Buyers are advised to have a feed analysis done prior to purchasing.
• Protein hay (lucerne and vetch) remains in tight supply with much of the hay in storage already under contract. Buyers are encouraged to source their winter supplies now to avoid higher spot market prices later in the year.
• There are good supplies of straw locally and demand is slow.

• Sale April rainfall: 39mm (Ave: 48.3mm).
• YTD: 105mm (Ave: 185.9mm), compared to 115.4mm this time last year.
• Rains continue throughout Gippsland. East Gippsland had its opening rains later than South Gippsland, but this week has recorded from 50 to 80 millimetres at the main dairy centres.
• SFW Wheat: $ -4 ($311 to $321). Wheat prices in south eastern Australia have eased back this past week. This is due to two key factors. First, the general rains through cropping areas in this region. Second, the rising value of the Australian dollar above 92 US cents.
• Barley: $ +0 ($287 to $397). Relative price movements between wheat and barley have reduced the discount of barley to wheat to $24 at tonne. Barley has now returned to within the traditional discount range of $20 to $25 a tonne.
• Triticale: $ +3 ($300 to $310). There is very little demand for triticale through Gippsland at this time. Demand is coming from the Western District.
• Feed Oats: $ +0 ($243 to $253). Demand for feed oats in this region has dropped off. This is due to plenty of rain and continued pasture growth for the past six weeks.

• Demand for lucerne hay remains steady this week. Cereal hay demand has eased slightly.
• Cereal hay supplies are good in Northern and Western Victoria. Quality is variable and may have deteriorated if not stored properly. Buyers are advised to get a feed analysis done before purchasing hay so they know what they are buying. Prices eased slightly this week to $240-$260/t.
• The supply of lucerne hay is largely hand to mouth at this stage. Vetch is difficult to source, where it can be found quality is variable.
• Demand for pasture hay remains steady.
• 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: 32.8mm (Ave: 51.4mm).
• YTD: 115.6mm (Ave: 155.4mm), compared to 62mm this time last year.
• The light rains received in some weeks have not been enough to allow for seed germination on heavy clay soils.
• Sowing of canola, followed by wheat, will commence once the clays receive at least 25 millimetres of rain.
• SFW1 Wheat: $ -4 ($272 to $282). The exchange rate is firming, to above 93cents. This automatically adjusts the exporter price bids for wheat and canola downwards. Cropping areas that have received promising pre sowing rains has encouraged more growers to sell wheat in the current financial year.
• Feed Barley: $ +0 ($242 to $252). Prices have remained steady at a discount of $30 a tonne to wheat.
• Triticale $ +3 ($261 to $271). Buying interest in triticale continues for future winter use.
• Feed oats $ +0 ($234 to $244). Most areas of south eastern Australia have enough autumn feed and oat prices dropped. The exception has been this region, meaning the prices have remained steady for this week.

• Demand for hay has eased following good rain over the past week. High grade protein hay such as vetch and lucerne remain in steady demand.
• There are good stocks of cereal hay still available in North Western Victoria but quality is variable. Buyers should be wary of hay that has not been stored properly. Always have a feed analysis done just prior to purchase so you know what you are buying.
• Lucerne hay is still available in parts of Northern Victoria and South East South Australia. There is some buyer resistance above $250/t on farm. At this stage many growers are storing hay for their own needs or waiting until demand picks up again later in the year as rather than selling in the current market.
• 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: 5.4mm (Ave: 54.7mm).
• YTD: 96.6mm (Ave: 142.3mm), compared to 55.2mm this time last year.
• South east of South Australia has had a relatively dry summer and autumn so far. Mount Gambier only had 2mm of rain while the rest of the state had had 20mm or more and the rain was expected to continue. This region does not usually have problems with rainfall deficits and none are expected this year.
• Wheat $ -4 ($292 to $302). With the exchange rate at plus 93 US cents on Tuesday night this automatically adjusts the exporter price bids for wheat and canola downwards. Other cropping areas of south eastern Australia have had promising rains which has encouraged more growers to sell wheat in the current financial year.
• Feed barley $ -5 ($263 to $273). Barley prices are easing as buying for the drought areas of northern New South Wales becomes more relaxed on the back of heavy rains. Exporters are now setting prices again. The exchange rate rising has made grain bids lower.
• Triticale $ +0 ($275 to $285). Main demand for triticale is from south west Victoria and has been bought for winter use. Enough buying interest to support triticale prices in a grain market that is slipping.
• Oats $ +0 ($227 to $237). With the new season cropping prospects improving throughout south eastern Australia, the demand for feeds oats has slipped back. However, follow up rains in the next month will be needed before oat prices slip from the current levels.

• 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 remain steady after firming slightly last week. .
• Demand for lucerne hay is steady at present. Prices have remained stable for the past few weeks.
• Pasture hay is in good supply but quality is variable.
• Straw is available and quality is generally good.

• Murray Bridge April rainfall: 20.8mm (Ave: 28.6mm).
• YTD: 127.2mm (Ave: 81.9mm), compared to 35mm this time last year.
• Good steady soaking rains with most rain occurring Wednesday morning.
• Rain has brought on frantic grain sowing activity as soon as tractors and seeding rigs can get onto paddocks.
• Wheat $ -4 ($262 to $272). The exchange rate on Wednesday at midday was 93.46 US cents, which automatically adjusts the exporter price bids for wheat and canola downwards. Cropping areas of south eastern Australia and SA have had promising pre sowing rains, thus encouraging more growers to sell wheat in the current financial year.
• Feed barley $ -10 ($230 to $240). Grain prices are easing back as the Australian dollar gains strength and goes up. The drop of $10 a tonne this week seems to be an overreaction and will have to wait and see where the currency settles.
• Triticale $ +0 ($255 to $265). Main demand for triticale is currently from southwest Victoria that has had a dry summer and autumn till this week. This has not had an impact on triticale prices north and east of Adelaide.
• Feed Oats $ +0 ($183 to $193). With new season cropping prospects improving all through south eastern Australia the demand for feed oats has slipped back to low. We will require follow up rains within a month before oat prices slip from current levels.
• After summer rains, now this very timely fall, South Australia growers east of Port Augusta are confident about their yield prospects.

• Demand for hay on the domestic market has eased further this week but drought affected farmers, feed lots and feed mills in Northern Australia are still looking to Central SA for cereal hay.
• Cereal hay supplies are good but quality is variable.
• Supplies of protein hay (medic and vetch) are low and may be difficult to source later in the year. Demand from dairy farmers 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: 1.2mm (Ave: 35.3mm).
• YTD: 12.2mm (Ave: 69.3mm), Compared to 39.6mm this time last year.
• There is rain around this region but not as of yet on dairy farms. Hopefully a good opening rain is not too far away. Albany had a good rain this week, but Bunbury only received one millimetre.
• Most of the Australian grain consumption centres recorded drops in the wheat price following good opening rains for winter cropping and the Australian dollar increasing.
• Wheat $ 7 ($322 to $332). The rise in wheat price goes against the wheat pricing trend that is currently in position. The exchange rate is firming and has passed 93 US cents. The local rise is due to some short positions of WA traders to the domestic market for end of April execution. We expect wheat prices to go back on trend and to ease over May, other things being equal.
• Barley $ +3 ($290 to $300). Barley prices remain reasonably steady with a slight increase. Trading at a discount of $32 a tonne to wheat.
• Triticale $ +20 ($300 to $310). This price rise should only be temporary. Buying triticale was seen as a way of avoiding the current wheat price rise blip.
• Oats $ +0 ($200 to $210). No real interest in feed oats at this current time.

• Hay trading on the domestic market remains steady this week. Both pasture and cereal hay are in demand.
• Unlike the eastern states WA has not received good rains yet, and following the long dry summer supplies of hay are low.
• There is still 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 and supplies will be tight throughout 2014.
• Pasture and silage is in short supply.
• Straw production was above average this year.

• Smithton April rainfall: 9mm (Ave: 59.8mm).
• YTD: 126.4mm (Ave: 184.7mm), Compared to 95.6mm this time last year.
• It was very wet last week but since then it has been relatively dry.
• Wheat $ -3 ($355 to $365). Prices continue to drop as exporter bids take the bulk of the trading through Victorian and South Australia. There has been some buying interest in Tasmanian red wheats and similar varieties from Victoria’s Western District.
• Feed barley $ +0 ($327 to $337). Barley prices remain soft and unchanged, with the margin between wheat and barley coming closer together on the mainland.
• Triticale prices $ +3 ($336 to $346). As winter approaches there is more interest in triticale purchasing now for feeding in the coming months.
• Oats prices $ +0 ($313 to $323). Demand for mainland feed oats has gone quiet since the recent rains through NSW and SA.

• The hay market remains fairly steady this week. After good rain in the past week the market may slow in the coming weeks.
• Cereal hay supplies are low and quality is variable.
• Lucerne supplies are low and sourcing lucerne hay will be difficult throughout winter.
• The supply of pasture hay is good. 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.