Grain – Hay Report – 1 May 2014

International & National Summary – Grain:

• CBOT jumped this week on the back of a combination of bullish events across the globe. This time of year is traditionally a ‘weather market’ as prices follow any updates to weather forecasts effecting US winter wheat. Predicted rainfall over key US winter wheat growing regions didn’t eventuate this week, which saw CBOT futures strengthen. CBOT May wheat futures came up A$15/t to close on Tuesday night at A$278/t. A slightly weaker Australian dollar helped further reflect gains.
• The US winter wheat crop rated at good to excellent fell another 1% to 33% on rain forecasts that failed to eventuate. History shows that harvest is still some time away and average yields are still plausible yet less likely as conditions continue to worsen.
• US spring plantings are behind schedule at the moment for both corn and soybeans. This has led to some short-term support for prices but it is important to remember that planting progress can occur rapidly when weather permits. Last year 43% of the corn crop was planted in one week. Current forecasts are for a dry 7-14 days, which will see planting pace, pick up.
• Also firming international values is the continuing Ukraine/Russian tensions. With the two looking like moving further away from a resolution underlying market support will continue. Don’t expect any drastic market reactions to the crisis unless the movement of physical grain becomes effected. A reasonable level of risk is already priced into the market.
• This storm of bullish market events has been passed onto domestic values with most port zones seeing increases this week. It seems old crop trading is almost done with traders having filled their quota and growers failing to engage in the market. There may be opportunity to secure forward purchases as growers renew confidence in the season after solid rains along the east coast. Its expected new crop wheat values will remain supported domestically. Tight carry out stocks and market anticipation of El Niño event will support values until there is certainty over production.
• In northern regions of Australia bulk vessels are reported to be unloading in Brisbane to supply the ever tightening domestic balance sheet. This may see temporary relief for feed prices. Expect to pay import parity for any grain due to limited volumes available locally. Sorghum harvest is well underway and the influx of supply has seen prices drop significantly. With sorghum public bids up to $50 below wheat, well below historical levels, it should represent affordable buying. Traditionally the price relative to wheat narrows later in the year.

National Summary – Hay:

• The demand for hay has remained fairly steady this week, resulting in little movement in hay prices. The hay market is expected to remain stable over the coming weeks until temperatures start to cool off.
• Some buyers in Victoria and South Australia are taking advantage of slightly lower grain prices or agistment as a more cost effective option than buying hay. This could see the demand for hay ease slightly in these regions in the next few weeks, but is unlikely to impact on the long term demand for hay this year.
• The key hay growing regions of Western Australia received some good rain this week which was welcomed by all farmers after a hot dry summer. Some growers have commenced sowing pastures and winter crops following the rain.

Northern Australia:

• Demand for hay remains steady. Some regions are still waiting for an autumn break and relying on purchased fodder. Buyers in the New England region are busy trying to secure their hay supply for winter as temperatures cool off.
• Hay supplies remain tight with most hay being sourced from Victoria and South Australia.
• There is some concern in Northern NSW about water allocations for irrigation later in the year. Low rainfall YTD means there has been little run off into water storages. Low water allocations could impact the amount of lucerne produced later in 2014 and may see lucerne supplies remaining low for some time through that area.
• In the Central West region there is a lot of interest in planting cereal crops for hay this year.
• South East Queensland Hay Contractors are still baling pasture (Buffell Grass) and stubble (Sorghum) feedlots and livestock producers are active buyers.

Southern Australia:

• Demand remains steady this week with Northern buyers keeping the market busier than usual for this time of year.
• Growers have taken advantage of the favourable conditions to plant pastures earlier in autumn and are preparing for winter crops to go in over the next few months.
• Local demand for cereal hay and lucerne hay remains steady.
• Most lucerne producers in North Central Victoria are finishing their final cut of lucerne for the year. Rain has interrupted baling for many and some growers have opted to make silage or haylage rather than hay due to concerns over high moisture. Now could prove a good time to source good quality lucerne silage from your preferred supplier in North Central Victoria.
• Straw supplies are average and demand is slow.

Western Australia:

• The demand for cereal hay remains strong to dairy farmers and livestock producers in the South West of the State. This will continue for some weeks until paddock feed bulks up following rain this week.
• Lucerne hay supplies are very low and will be short throughout winter.
• Straw supplies are above average and quality is good. Feedlots and dairy producers are active buyers.

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 May rainfall: 0mm (Ave: 11mm).
• YTD: 468mm (Ave: 718mm), compared to 84mm this time last year.
• A fall of 28mm this past week in the Atherton Tablelands added to the 215mm the previous week. Clean-up activities from the April rain will take funds away and key activities such as tending and milking cows.
• Wheat: $ +5 ($413 to $423). Conditions for the next wheat crop all through QLD aren’t looking great. No useful rain to help sowing in the key wheat regions, so growers have to sow crops and hope for a follow up rain.
• Barley: $ +2 ($480 to $490). Anytime barley prices get above wheat they don’t have a place in dairy rations.
• Corn prices $ -5 ($355 to $365). With the sorghum harvest on in CQ, feed corn prices have eased all through QLD in the past week.
• Sorghum: $ -11 ($342 to $352). No useful rains over Easter, or recently for late sown crops. Good conditions for those into harvest. The moisture levels for harvest need to come down to around 13.5% still a few growers leaving bays here and there through harvest.
• Easing Sorghum prices across the board, this will provide some opportunistic buying where growers are keen to execute.

• Demand for hay remains steady but baling has been interrupted by wet weather over the past few weeks.
• Hay supplies are very low at present. Local supplies will not be replenished until later in May or June when the weather becomes more predictable.
• Prices remain unchanged this week.

• Toowoomba May Rainfall: 9mm (Ave: 36mm).
• YTD: 230mm (Ave: 360mm), compared to 755mm last year.
• Light scattered rain this week with many stations reporting no rain and no more than 5mm falling for those that did.
• Wheat: $ +5 ($382 to $392). Most of the old crop wheat is of human consumption quality. This isn’t ideal for animal feeders. Soil moisture levels in paddocks conducting wheat sowing are below average to low. Hence growers will be relying on some unseasonal winter rains and some spring rains to finish on. Not a great position to be in.
• Feed Barley: $ +2 ($366 to $376). Barley prices are just inside the normal trading band to wheat of $20-30/t. Sorghum is still cheaper than both.
• Corn $ -5 ($412 to $422). Harvest activities on other summer corps, mainly sorghum, are depressing feed corn prices but they are coming down from a very high level.
• Sorghum: $ -5 ($325 to $335). Dry weather is helping the stripping progress of the sorghum crops. The main obstacle currently is still the high grain moisture levels. Frosts will help to lower the grain moisture to prepare for stripping for later sown crops.
• Barley is still being trucked into this region from the Central West and south of there. Subsidies on road freight costs to this drought area are helping.

• Prices remain steady.
• Demand is also steady but has eased slightly in the past few weeks. Most livestock producers now have access to pasture after the recent rains, impacting the demand for hay.
• Local supplies of hay remain low. Most hay is being sourced from Victoria and South Australia. Freight is a large component of the cost of hay.
• In some regions contractors are baling low grade pasture hay (e.g. buffell grass) for producers and feedlots who are trying to secure feed for winter.
• Straw is currently very difficult to source and costly to freight. Buyers are sourcing sorghum stubble as an alternative, which is still being baled in some regions. Sorghum stubble is trading for around $180-$200/t delivered.
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• Lismore May rainfall total: 1mm (Ave: 72mm).
• YTD: 368mm (Ave: 670mm), compared to 843mm this time last year.
• This region has now had eight weeks of continuous pasture growth thanks to a regime of moist soils and warm conditions. Grasses are still mainly summer active species.
• SFW Wheat: $ +5 ($397 to $407). Most of the old crop in this area is of human consumption of what is left. Not ideal for animal feeders of any kind. They are planting on low moisture levels and will rely heavily on unseasonal winter and spring rains.
• Feed Barley: $ -3 ($380 to $390). Barley prices are just inside the normal trading band to wheat of $20-30/t. Sorghum is still cheaper than both.
• Corn $ +0 ($372 to $382). Harvest activities on other summer corps, mainly sorghum, are depressing feed corn prices but they are coming down from a very high level.
• Sorghum: $ +6 ($365 to $375). Dry weather is helping the stripping progress of the sorghum crops. The main obstacle currently is still the high grain moisture levels. Frosts will help to lower the grain moisture to prepare for stripping for later sown crops.
• Barley is still being trucked into this region from the Central West and south of there. Subsidies on road freight costs to this drought area are helping.
• Recently sown winter active species based on ryegrass cultivars are making progress and will be saved for use in late winter when the summer active species have dried off and probably browned off as well.

• Demand remains steady. Some buyers are still in drought or recovering from drought and some are seeking hay and silage in preparation for winter.
• All hay supplies are low and some buyers are still sourcing 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 causing issues for some growers.
• Lucerne hay supplies locally are very low and will not carry through winter. Rain easing over the last few weeks has given some growers the opportunity to take another cut of lucerne. Demand remains steady and prices firm this week.
• As the temperatures cool off lucerne production is starting to wind up for another year. Lucerne hay supplies will not be replenished now until production starts again in spring. There are now some concerns about the availability of water in 2014/15. If there aren’t good rains later this year lucerne hay production could be impacted.
• Pasture hay production is still ongoing. Quality is variable. Good pasture hay is difficult to source due to low yields in 2013 and strong demand earlier in the year.
• Straw supplies are low and there is still interest in baling sorghum and soybean stubble to meet the demand for roughage through winter.

• Forbes May rainfall: 0mm (Ave: 31mm).
• YTD: 284mm (Ave: 178mm), compared to 163mm this time last year.
• No rain was reported for Forbes this past week or from surrounding grain areas. However plenty of rain that fell from mid March to mid April to support planting moisture, setting it up for a promising start.
• SFW Wheat: $ -1 ($274 to $284). Wheat markets relatively steady. Incoming prospects for all winter crops are pie in the sky at this point but looking decent.
• F1 Barley: $ -1 ($256 to $266). Relatively stable this week. Feed barley prices are now slotted in at an $18 a tonne discount to wheat.
• Corn $ -5 ($410 to $420). Feed corn prices have dropped, not because of any changes in the supply or demand, but the sorghum harvest pressure north has proven an influential factor.
• Sorghum $ -4 ($360 to $370). Some sorghum activity on the Liverpool Plans for late sown sorghum crops. Harvest activity is responsible for the price drop. These prices include freight down from Gunnedah. Any local sorghum would be this price less the road freight.
• Soils are moist without being sticky, which has been helped by the dryness over the last fortnight or so. Thus sowing activity with lupins and wheat.

• Demand remains steady with feedlots, chaff mills and hobby farmers the most active buyers. There is also interest from buyers in drought affected regions of Western NSW.
• Although good paddock feed is available now some buyers are taking action to secure their winter feed. This trend is being driven by low supplies locally and reports of an El Nino later in the year.
• Cereal hay is very difficult to source in NSW due to the steady demand earlier in the year.
• Growers have not had trouble finding interested buyers for their final cut of lucerne for this season. Prices remain steady this week.
• Lucerne hay supplies are very low and will not be replenished until the 2014/15 hay season gets underway. There are now some concerns about water availability in 2014/15 if there aren’t good rains later in the year.
• Pasture hay is difficult to source and quality is variable.
• Straw is in strong demand. Straw supplies are low and some growers are considering baling summer crop stubble (sorghum, millet etc.) following harvest.

• Bega May rainfall total: 0mm (Ave: 48mm).
• YTD: 243mm (Ave: 312mm), compared to 194mm this time last year.
• The Bega Valley has only had a touch of rain this last week. Pasture growth remains strong from the rain just prior to Easter, totalling around 17mm.
• SFW Wheat $ -2 ($285 to $395). Wheat is still in strong demand for export out of Southern Australia ports. Prices have eased after the pre-Easter rallies. Growers are now getting the seed into the ground. Canola are the first crops to be sown, also some wheat, but growers won’t want all the crop at the same stage in development if a late winter/early spring frost comes through.
• Feed barley $ -1 ($263 to $273). $22/t discounts to wheat and well within the normal spread.
• Triticale $ +0 ($279 to $289). Triticale currently a touch high compared to the SFW price.
• Oats: $ +0 ($265 to $275). Plenty of new autumn feed now on the coastal grazing strip and also reasonable feed on the Monaro. Low demand for oats but prices is unlikely to fall.
• Most Riverina grain growers have had an excellent start to the season with some good planting rains in patches and some large at that, all through late March and April, hence most are busy seeding now.

• With paddock feed now available the immediate demand for fodder has slowed, but a there is still steady demand as buyers try to source feed for winter.
• Fodder supplies in NSW generally are low, with much of the hay in storage already under contract.
• Cereal hay prices eased slightly this week down $15 to $300-$320/t delivered. This is driven by the slowing demand for hay over the past few weeks. Further prices decreases are not expected.
• The market for lucerne hay continues to be hand to mouth, with tight supplies forecast throughout winter. Prices remain steady this week, and bulk lucerne is very difficult to source.
• Demand for straw has picked up slightly as buyers seek extra roughage. The market lifted $45 to $200-$220/t delivered to the Bega Region.
• Summer silage (maize, lucerne and sorghum) harvest is still continuing, rain is causing contractors some issues.

• Tatura May Rainfall total: 0mm (Avg: 45mm)
• YTD: 149mm (Ave: 182mm), compared to 91mm this time last year.
• 40-50mm throughout this area last week, all northern dairy regions received a bit in the weeks leading up to Easter.
• Wheat: $ -2 ($277 to $287). Wheat is on the expensive side of barley. Exporter interest in accumulating wheat behind southern ports should prevent any major price drop. Provided the major merchants aren’t yet covered.
• F1 Barley: $ -2 ($246 to $256).
• Triticale: $ +0 ($260 to $270).
• Feed Oats: $ -3 ($227 to $237). With abundant autumn generated grass and herbage, through all of south-eastern Australia. Demand for grain oats is low for sheep and cattle. The horse market around Euroa takes a heavier, more expensive grade of oats.
• The autumn break has now come to dry land paddocks and the feed will continue to make good growth for the first two weeks of May, then nightly frosts will cut fresh dry matter production.
• Grain growers in areas surrounding are busy seeding on the back of good rains through April, coupled with the traditional planting window.

• Buyers in drought affected Northern NSW and QLD are still sourcing cereal hay and lucerne from Northern Victoria. This increased demand is having an impact on the amount of hay available in Northern Victoria, particularly for lucerne hay.
• Cereal hay supplies are good throughout Northern Victoria. Prices are remaining steady at $200-$240/t delivered.
• Lucerne hay supplies are low. Some growers are still waiting to finish their last cut before winter. Wet conditions have slowed hay production in the past few weeks and some growers have opted to bale lucerne silage or haylage rather than hay due to the conditions.
• There are good supplies of straw locally but a large amount is already under contract.
• Prices remain steady this week.

• Sale May rainfall: 0mm (Ave: 52mm).
• YTD: 129mm (Ave: 237mm), compared to 150mm this time last year.
• SFW Wheat: $ -2 ($311 to $321). Wheat is within the realm of average spread between wheat and barley. Exporter interest still for exports in Victorian and South Australian ports. Most of the grain held within VIC and Riverina grain storage is of human consumption category.
• Barley: $ -2 ($288 to $398).
• Triticale: $ +0 ($302 to $312). Little interest in triticale at this time. Grain feeding through Gippsland is light currently through Nth East Vic and Southern Riverina.
• Feed Oats: $ -3 ($245 to $255). The horse demand for grain oats is for a sample weighing heavier than the basic feed quoted in the prices here.

• Demand for hay remains steady this week, after easing slightly in the past few weeks.
• After a good autumn break paddock feed is now readily available, for some dairy farmers and livestock producers agistment is a more attractive option than buying in hay.
• Cereal hay supplies are good in Northern and Western Victoria. Quality of 2013 baled hay is variable. Buyers are advised to get a feed analysis done before purchasing hay.
• The supply of lucerne hay is low throughout Victoria and demand remains steady. Vetch is difficult to source, where it can be found quality is variable.
• Demand for pasture hay is slow although there is a small amount of trade between farms locally.
• Some straw is available in Gippsland but quality is variable. Gippsland buyers seeking straw are sourcing it from North Central and Western Victoria.

• Port Fairy May rainfall: 0 mm (Ave: 69mm).
• YTD: 188mm (Ave: 1224mm), compared to 94mm this time last year.
• This region has had a poor autumn so far with minimal rainfall. Coastal areas have had enough rain for grass to grow, but inland the heavier clays don’t have any green autumn grass.
• SFW1 Wheat: $ -2 ($272 to $282). Most the wheat held within Vic and lower South Eastern Australia is all human consumption quality. Not a good position for dairy farmers wanting wheat for winter-feeding.
• Feed Barley: $ -2 ($243 to $253). Feeding grain has been necessary because of the lack of rain in central areas away from the coast.
• Triticale $ -3 ($260 to $270). Doesn’t appear to be much triticale held close to this dairy area. Growing one of the red winter wheat varieties seems to be a more rewarding activity.
• Feed oats $ +0 ($239 to $249).
• An opening rain inland has finally come. This rain should continue through until the start of next week. This is a reliable region, rainfall wise; there should be no further concerns for soil moisture for pastures and crops until late spring.

• Demand for hay remains steady. Good pasture feed is now available and buyers are opting to utilise pastures rather than buying hay. More competitive grain prices are also having an influence on the demand for hay.
• There are good stocks of cereal hay still available in North Western Victoria but quality is variable. Always have a feed analysis done 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. In general supplies are much lower than usual for this time of year and will be tight through winter.
• Pasture hay is in good supply but quality is variable. Good quality pasture hay for trading may be difficult to source this year.
• Some straw is available locally and quality is variable.

• Mount Gambier May rainfall: 0mm (Ave: 71mm).
• YTD: 152mm (Ave: 213mm), compared to 92mm this time last year.
• The seasonal break has finally arrived for the region with Mount Gambier receiving 39mm.
• Sowing has commenced with many already finished planting canola and moving onto wheat and barley.
• Wheat $ +5 ($299 to $309). Strong demand from South Australian export organisations has seen prices increase. Reports of bulk vessels of feed wheat bound for Queensland being loaded.
• Feed barley $ +6 ($269 to $279). Barley is still cheaper to source from Victoria with large quantities reported to still remain in storage on farm.
• Triticale $ +5 ($283 to $293). Triticale pricing is following wheat prices up and may go even closer.
• Oats $ +0 ($230 to $240). Recent rains have seen the demand for feed oats subside.

• Demand for hay remains quite slow locally. There is reasonable paddock feed at present and buyers are choosing to rely on their pastures rather than buying hay through autumn. Low cattle prices may be having an influence on demand for hay as producers try to their reduce costs.
• Demand for fodder is not expected to pick up until the temperatures cool off in the coming months.
• Cereal hay supplies are below average locally and quality is variable. Prices picked up slightly this week and are now trading at $200-$220/t delivered.
• Demand for lucerne hay is steady at present. Prices have eased about $10 and hay is trading at $280-300/t.
• Pasture hay is available. Prices have lifted $20 and are now trading at $160-180/t.
• Straw supplies seem to be diminishing. Trade has been steady and prices remain steady.

• Murray Bridge May rainfall: 0mm (Ave: 34.9mm).
• YTD: 143mm (Ave: 116mm), compared to 57mm this time last year.
• Further rains in the region are arriving at the perfect time for cropping areas. Parawa received a weekly rain to Wednesday morning of 39 millimeters, Victor Harbor 27, and Murray Bridge 14 millimeters.
• Wheat $ +5 ($268 to $278). Old season wheat is seldom trading but there is still strong demand from exporters.
• Feed barley $ +6 ($251 to $261). The demand for barley from end users at this price is minimal. The rise in price is being driven by export instead.
• Triticale $ -5 ($255 to $265). Many growers holding triticale are not looking to sell until mid winter. At current spread to wheat it is attracting some demand form end users.
• Feed Oats $ +0 ($183 to $193). Minimal demand for feed oats. Any oats for export are higher grade then the basic feed oats quoted here.

• Demand for hay on the domestic market is slow at present, as is typical of this time of year.
• Buyers in Northern Australia seeking cereal hay have started to ease following rain in those regions. Cereal hay supplies remain good but quality is variable.
• Supplies of protein hay (medic, vetch and lucerne) are low and are expected to 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.
• With trading slow prices remain steady for another week.

• Bunbury May rainfall: 0.2mm (Ave: 95mm).
• YTD: 27mm (Ave: 69mm), Compared to 62mm this time last year.
• Really good rains received in the region today ranging between 40-60mm through most of the states wheat belt. The front came through at a crucial time as many growers had already commenced sowing.
• Wheat $ +10 ($330 to $340). Exporter bids are proving stronger after the Easter period. WA seems to be one the few regions able to supply large quantities of wheat required for shipments.
• Barley $ +0 ($290 to $300). At the current $44 spread to wheat demand from end users is high.
• Triticale $ +0 ($300 to $310). Prices remain at higher levels with demand coming from stockfeed mills. Many growers are waiting to closer to winter when they are more assured around production before selling.
• Oats $ +0 ($220 to $230). Recent rains mean demand has subsided significantly.

• Hay trading on the domestic market remains strong with both low to medium grade cereal hay in demand in the South West of the state.
• WA has finally received some good rain after a long dry summer. This will bring optimism to hay growers and some relief to livestock producers and dairy farmers who have been reliant on purchased feed.
• Sowing winter crops has commenced.
• Supplies of cereal hay 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.
• Straw production was above average this year and supplies are good. Feedlots and pellet mills are the most active buyers.

• Smithton May rainfall: 0.2mm (Ave: 79.8mm).
• YTD: 202.8mm (Ave: 264.7mm), Compared to 159.4mm this time last year.
• Northern Tasmanian dairy centre’s rains, ranged from 35 millimetres to 70 millimetres, with Wynyard recording 49 millimetres and Barrington 38.
• Wheat $ -2 ($354 to $364). Mainland traders are reporting difficulty of shipping grain into Tasmania. Local red wheat supplies and Tasmanian feed barley are proving price competitive at this stage.
• Feed barley $ -2 ($328 to $338). Demand for mainland feed barely is minimal at the moment. Quality of grazing seems adequate enough not to warrant importing grain from the mainland.
• Triticale prices $ +0 ($339 to $349). No price change since Easter with demand minimal. Quality pasture grazing means grain-feeding requirements are extremely low.
• Oats prices $ -3 ($315 to $325). Prices are holding steady despite the minimal demand. Seems to be very little trading at the moment as most dairy producers rely on natural feed.

• The hay market remains steady this week.
• Cereal hay supplies are low and quality is variable. Demand has been steady over the past few months for cereal hay and may increase if grain prices continue to strengthen.
• 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.