Grain – Hay Report – 6 September 2013

International & National Summary – Grain:

• In a period where markets were being swept up in changing weather conditions in the US Midwest, this week has seen the focus return to the wheat balance sheet. International prices have pulled back, failing to build on the sharp rally at the beginning of last week.
• This change of focus has put conditions in the southern hemisphere on the radar, with concerns about moisture in Argentina, and frost and dry concerns in Australia. Despite reduced estimates in these regions a number of global estimates have increased with forecasts improving in the Canadian and Black Sea growing areas.
• Following last year’s drought in the US, corn and soybean balance sheets are historically tight as grain users bank on the coming harvest to replenish stocks. Weather conditions are critical to determining total crop size.
• Varying yield estimates to the US corn crop due to changing weather conditions has seen increased volatility in the market. Despite real damage being done to the US corn crop because of the recent hot weather production is still estimated to be at a record level this year. This has the potential to create further weakness in international grain values upon hitting the market.
• The falling A$ from above parity to around US0.91cents has kept A$ prices about steady over the last few months, despite the decline in US$ values of grain.
• Australian and US wheat continues to be uncompetitive against cheap wheat from the EU and Black Sea. Good harvests in both areas have seen export business go through well under Australian replacement track price levels.
• The month of August has seen production potential of Australian crops decrease as rainfall fell short in NSW and QLD. Current conditions are seeing premiums of $20-$30/t demanded for new crop. Reports indicate the lack of rainfall and current dry warm spell is costing yield in these regions as well as the northern Victorian Mallee. Forecasts have improved in a very limited number of regions including Western Victoria and south eastern South Australia. In further heartbreak, frost events have also caused significant damage in northern NSW and small patches of SA.
• The old crop situation remains relatively unchanged. Supply of feed products remains very tight and thinly traded. With limited supplies available if you are requiring feed over the next few months it may be wise secure grain early as it gets more difficult to source. Bulk majority of trade seems to be occurring out of on-farm storage.
• As the Australian market stands it is expected old crop prices will be maintained until new crop begins to stem the supply shortage. Upon harvest commencing it is expected there will be downward pressure in southern regions if spring conditions continue to develop favourably.

National Summary – Hay:

• Hay trading has slowed considerably in the past few weeks as the fodder season is just around the corner.
• Over the past few weeks prices have started to ease for Lucerne hay with the slowing demand for protein from the dairy sector. Horse and hobby farmers, as well as the chaff mills are still active buyers in the premium quality end of this market.
• Cereal hay prices have dropped over the past few weeks but remain steady this week in most regions. Demand is slow and new season hay isn’t too far away so buyers are trying to hold off for further price reductions.
• All regions are indicating that pasture hay supplies are now more or less depleted. Despite strong demand in some regions the product there is very little of it being traded currently seeing prices remain steady.
• Straw is still in demand, particularly in South West Victoria, South Eastern South Australia, Gippsland and the Bega valley however it is is increasingly hard to source. It is mostly being used to supplement high moisture pastures.
• The major dairy regions of Victoria, being SW Vic and the Goulburn Valley are seeing a decrease in demand for fodder. Local reserves are low and fodder is typically being sourced from well outside these regions. Suppliers in each of these areas are now saying that they have depleted all of their supplies or were ‘loading the last truck’.
• Many fodder suppliers across the east coast of Australia are now ‘cleaning’ out any reserves in anticipation of the approaching spring. This may offer an opportunity to some buyers although quality and varieties of fodder are fairly limited.
• There are reports of early season silage commencing this week in North Central Victoria. Quality and yields are looking fairly good at this stage.
• Silage will soon begin in the Goulbourn Valley and parts of Gippsland with paddocks now locked up and producers waiting on suitable drying conditions. With good water allocations available for the summer cropping season it is likely that there will a solid fodder growing season in the Goulburn Valley of Victoria. Producers in this region are gearing up to begin doing a first cut of silage or lucerne in the coming weeks.

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.

Notes: Prices are estimates based on delivery to dairy farms with allowance for freight, storage, and marketing costs, but exclusive of GST. Wheat prices are for the relevant stockfeed wheat available in a region (ASW, AGP, SFW1 or FED1) and F1 for barley.

Notes: Hay prices are delivered, GST exclusive based on shedded hay without weather damage, of good quality and colour. It should be noted there is a wide variation in quality for hay, so prices are indicative for a mid-range product.

• Mareeba September rainfall: 4mm (Ave: 4.2mm).
• YTD: 716mm (Ave: 742.5). Rainfall for this time last year was 835mm.
• Atherton only received five mm this week, not enough to alter routine irrigations.
• Wheat: $ +5 ($387 to $397). CQ old season wheat has been trucked south for stockfeed. CQ wheat harvest has started in some paddocks and will kick off in most in the next few days. Early stripped wheat is usually of high human consumption quality.
• Barley: $ +5 ($415 to $425). Still higher than wheat, this will change in early Oct when first barley from SQ is reaped.
• Corn prices $+10 ($398 to $408). Sellers have put up prices, with wheat and barley prices creeping up.
• Sorghum: $ -3 ($335 to $345). Sorghum is currently best buying, until new feed grade wheat starts to come through.
• New irrigated grain and forage crops establishing well, new crops not up to grazing or cutting bulk yet.
• Corn silage very useful for maintaining milk supply in cows.

• Currently seeing very low volumes of fodder traded in the Atherton tablelands.
• Rhodes grass Hay – Steady- ($265-$285): Supplies of hay are lower than usual, after a dry wet season; however the quality is good as baling conditions have been favourable.

• Toowoomba September Rainfall: 0mm (Ave: 38.4mm).
• YTD: 899mm (Ave: 499mm), compared to 477mm this time last year.
• No rain again this week through SQ, the combination of dry soils, no rain and clear skies has brought on frosts.
• Wheat: $ +5 ($331 to $341). Stronger pricing as incoming crop prospects start to deteriorate. There will be a crop but yields are lowering.
• Feed Barley: $ +5 ($331 to $341). Price reduction follows lower prices elsewhere in Aust. However the truth is only minimum quantities of old crop feed barley in SQ and NWNSW.
• Corn $ +10 ($340 to $350). Very few corn buyers identified during this time of year.
• Sorghum: $ +0 (303 to $403). Stronger demand for sorghum from local intensive livestock enterprises.

• There are reports of some early crops being cut, following frost damage which occurred last week.
• Cereal hay remains unchanged this week, but a reported drop in demand has seen the price come back slightly in the past few weeks. There is very little available but new season product isn’t too far away.
• There is very little lucerne hay being traded in the region with the main buyers of any volume being the horse sector. Early new season lucerne should become available soon.
• Pasture hay has been extremely hard to source in the Darling Downs. Accordingly there has been limited trade and no indication of change in the current price for the small volumes being traded.

• Lismore September rainfall total: 1mm (Ave: 41mm).
• YTD: 1025mm (Ave: 912mm), compared to 953mm this time last year.
• No rain again this week on either north coast areas or mid north coast farms. Still good grazing conditions for cows though.
• SFW Wheat: $ +5 ($374 to $384). Downs crops will finish due to quality of the Down soils, which can draw water for crops down to a metre in the soil however without rain in the critical filling stage the yields will be lower and grain protein higher.
• Feed Barley: $ +5 ($381 to $391). Out of contention for price. SQ harvest will start within a month and prices could tumble down to a $20 a tonne discount to stockfeed wheat.
• Corn $ +5 ($380 to $390). The rise is more on corn holders’ views of the worth of their grain. Very few sales are being made, with high quality paddock feed from winter improved pastures, mainly ryegrass there is little need for grain.
• Sorghum: $ +0 ($322 to $332). The cheapest feed grain at present by far.
• SWQ crops are currently stressed for moisture; they won’t fall but are going to yield less than the earlier forecast.
• A premium has developed in this area for wheat and barley for this reason and without rain soon, this premium will continue to increase.
• If rain is to come in the next fortnight the prices could ease.

• The region is still very damp after one of the wettest years on record. Pasture growth has slowed and some buyers are looking to purchased fodder for supplementary feeding.
• Lucerne and cereal hay prices remain unchanged with new season hay not far away and more interest in cheaper pasture hay.
• Pasture hay has been in very limited supply for many months and prices have not changed over the past week.

• Forbes September rainfall: 0mm (Ave: 41.4mm).
• YTD: 383.2mm (Ave: 344mm), compared to 513mm this time last year.
• No rain for a further week. Soils still moist enough to keep crops growing very well.
• But spring rains are vital for wheat and barley yields.
• SFW Wheat: $ +5 ($243 to $253). Wheat currently in strong demand for old crop and new crop by exporters and domestic flower millers/starch manufacturers that didn’t adequately accumulate last harvest.
• F1 Barley: $ +5 ($211 to $221). The cheapest energy grain by far for spring use. Margin could widen further from a general rain through the central west in two to three weeks.
• Corn $ +0 ($365 to $375). Too expensive for use currently. Perhaps any Riverina feed corn may be cheaper deld than more northern grain.
• Sorghum $ -6 ($317 to $327). Not useful this far south, due to the road freight disadvantage. Any old crop sorghum that is stored local would have great appeal.
• Rail traffic to Newcastle is set to stop soon as drivers have been asked to take holiday leave during this slack period, putting more pressure on this grain region to supply wheat and barley to Port Kembla over spring months.

• Demand for fodder is beginning to decline as pasture growth increases.
• Many fodder suppliers are cleaning stocks in preparation for the new seasons hay coming in. This may present opportunities for buyers.
• Demand for fodder is steady through the central west but supply is limited. The key buyers are hobby farmers and chaff mills. Bulk hay, particularly of lucerne in big squares is now in very short supply.
• Most classes of fodder are steady in price compared to the last report.
• There remains solid interest in premium grade Lucerne particularly small squares for the hobby and horse industry. Little bulk Lucerne hay is available.

• Bega September rainfall total: 0.2mm (Ave: 31.2mm).
• YTD: 352mm (Ave: 471mm), compared to 670mm this time last year.
• Very patchy rain this week across the Bega Valley, an inch would do a world of good in this area. Incoming grain prospects just north in the southern slops and the Riverina are looking excellent.
• SFW Wheat $ +5 ($269 to $279). Margin b/w wheat and barley is likely to widen further to $30 a tonne, barley has the advantage for spring use with dairy cows.
• Feed barley $ +5 ($239 to $249). The preferred feed for spring. The higher energy of triticale isn’t of much economical benefit whilst cows are getting so much energy and protein from the spring grass.
• Triticale $ +0 ($236 to $246). Steady, probably a good switch for barley given that there isn’t a premium between the two.
• Oats: $ -5 ($238 to $248). No demand anywhere for oats for grazing animals.
• Central grain areas are doing very well on stored winter rainfall; they will need a heavy rain by mid month to stop yield prospects falling.
• Stronger export interest in wheat compared to barley for both old crop and new crop. Current grazing conditions good, they will deteriorate on the hill country if there is no significant rainfall by the end of the month.
• New purchases are favouring barley because of its lower cost of unit energy.

• Demand for fodder is fairly slow, with straw being the exception. Buyers are seeking straw although supplies are low.
• Fodder to the Bega Valley is coming from Central West NSW, the Southern Tablelands and the Riverina and is in very short supply.
• The past week saw all fodder prices remain steady after a drop in cereal and lucerne fodder prices by $20/T in the previous week.
• Pasture hay is extremely low in supply with many suppliers indicating that they have sold out many months ago.

• Tatura September Rainfall total: 0.2mm (Avg: 43.5mm)
• YTD: 271mm (Ave: 366mm), compared to 422mm this time last year.
• Some to little rain this dairy region over the past week but all than a few mm, however there is plenty of high quality feed.
• Wheat: $ +4 ($278 to $288). $48 above feed barley markets makes wheat very unattractive for use on dairy cows in this region at present.
• F1 Barley: $+0 ($229 to $239). Barley is out of vogue with exporters at present time. Makes good buying against wheat for spring and early summer use.
• Triticale: $ +0 ($250 to $260). Just a few parcels from the northeast coming forward.
• Feed Oats: $ -5 ($190 to $200). Oats not anted at this time for outdoor grazing stock.
• Grain usage is relatively low at this point in time. Mainly aimed at getting the best out of cows with genetic potential, than would be possible on grass alone.
• Barley favoured strong for spring use, here and all through South Eastern Australia.

• Fodder trading is slow as early spring feed is now readily available. Prices are beginning to soften for most categories.
• Early cut silage has commenced in some parts of the region with good yields reported near Cohuna and Lake Boga.
• Prices are unchanged this week, although cereal and lucerne hay prices have eased over the past few weeks, reflecting the lower demand and decreasing quality of the remaining supplies.

• Sale September rainfall: 0mm (Ave: 51.6mm).
• YTD: 386.8mm (Ave: 422.5mm), compared to 459.1mm this time last year.
• Superb grazing conditions as the Gippsland area received another 5-10mm of rain this week.
• SFW Wheat: $ +4 ($311 to $321). The price spread compared to barely is very high with strong export interest in wheat.
• Barley: $ +0 ($271 to $281). Domestic demand for feed barley remains slow with increased competition from Black Sea barley for exporters.
• Triticale: $ +0 ($287 to $297). Very little remaining stocks of old crop and is only trading in small parcels at the moment.
• Feed Oats: $ -5 ($205 to $215). Very little demand at all currently. Fewer oats now being used on sheep anywhere in South Eastern Australia. Market confined to horse feeds and young poultry rations.
• Milk production for September should be similarly impressive
• More grass growing, farmers are able to alter cow-grazing rotations to allow some paddocks to be locked up already for silage and hay production.
• Feed is of a high quality with satisfying growth responses.

• Demand for fodder has decreased considerably across the region as spring feed becomes more readily available.
• Silage will commence in the next 2-4 weeks and decent yields should be seen if conditions are favourable at baling.
• There are marked differences in prices being paid from east to western Gippsland with differences up to $100/T for the same product (driven by freight costs).
• There is very little lucerne being traded, partly driven by cost and dairy farmers have ample green grass for livestock.
• After reporting a big drop last week cereal hay prices remain steady this week, due to little trading activity.
• There remains steady demand for straw, with particular interest is in barley straw.
• Pasture hay is in demand for use by dairy farmers as a high quality roughage source; pasture hay is very difficult to source.

• Port Fairy September rainfall: 4mm (Ave: 72.9mm).
• YTD: 638.8mm (Ave: 564.8mm), compared to 571.6mm this time last year.
• Another 5-10mm of rain this week with little run off and further soil penetration.
• SFW1 Wheat: $ +4 ($281 to $291) The price spread between other commodities is very high with strong exporter interest in wheat currently. This time of year it is traditionally better to go for barley and take advantage of the historically wide margins for feed barley.
• Feed Barley: $ +0 ($238 to $248). Exporter interest is lower with more competition coming from the Black Sea barley exports.
• Triticale prices $ +0 ($260 to $270). Not much around but still very useful as a substitute or wheat extender. Realistically there are very few parcels available and even fewer trading.
• Feed oats $ -5 ($186 to $196) Fewer oats now being used on sheep anywhere in SE Australia. Good prospects for incoming crops resulting in very little current demand. Demand is confined to horse feed and young poultry rations.
• Incoming western Victorian crops are doing very well at the moment.
• Expecting milk production for the September period to be an impressive figure.
• Grass is of a much lower grazing quality, hence the need for high energy grain.

• Demand for fodder is slowing now with some more pasture and winter feed becoming available for grazing. Lack of cash flow is also a prominent factor in the buyer’s ability to pay for fodder.
• Prices remained unchanged this week, likely due to the lack of trading activity, low supplies of fodder and new season stock not too far away.
• There is very little demand for lucerne hay due to the increasing amounts of high quality pasture available across the region. It’s also worth noting that lucerne supplies are extremely low, with any stocks coming from SE SA or North Central Victoria.
• Pasture hay is now mostly unavailable. Any producers with supply will have locked in supply and price many months ago thus there is no change in pasture hay prices, despite significant demand and reduced supply.

• Mount Gambier September rainfall: 0.6mm (Ave: 72.6mm).
• YTD: 560mm (Ave: 564mm), compared to 521mm this time last year.
• A further 11mm at Mount Gambier this week as grazing pressures continue.
• Wheat $ +12 (287 to $297). At current prices barley is favourable with strong export demand for the commodity continuing.
• Feed barley $ -12 ($232 to $242). This wide margin below the wheat price makes barley the obvious choice.
• Triticale $ -10 ($230 to $240). It is in short supply but represents good buying within this price range. Its extra energy over barley is not currently of commercial value to dairy farmers.
• Oat prices $ -10 ($170 to $180) Most of the sheep areas have enough new feed that they do not currently need any grain oat supplements. Price drop is being driven by the lack of demand.
• The failure of summer and autumn rain saw grazing bulk greatly reduced in the region.
• Incoming crops in western Victoria and southeast South Australia as well as the Murray Mallee are improving with July and August rains. Growers are hoping the wet winter will harbour a wet spring and a good finish.
• Barley is the grain to use now, as it is cheaper to source from South Australia.
• The region is extremely wet but lacking in in grass for cows. What grass there is remains rich in protein but lacking fibre.

• The emerging hay season appears to be promising with good soil moisture and as the days warm up, pasture and crop growth is increasing.
• Demand for all categories of fodder has slowed significantly. However as supply is also very low there is no significant change in price for any category.
• There is no lucerne being traded in the region at all, with the exception of in small squares to the horse and hobby trade, the price for which remains steady.

• Murray Bridge September rainfall: 0mm (Ave: 36.5mm).
• YTD: 270mm (Ave: 262mm). 361.9mm this time last year.
• Some rain fell throughout the region this week, Parawa received 20mm and Victor Harbour 14mm.
• Wheat $ +6 ($287 to $297). Export demand for wheat remains strong. Most old crop wheat left is of human consumption.
• Feed barley $ -8 ($243 to $253). Not a strong demand as exporters meet competition from Black Sea’s grain exports.
• Triticale $ -5 ($250 to $260). Incoming prospects for all crops are good and improving, hence the need to quit old crop stocks ahead of a new harvest. Only very small parcels available currently.
• Feed oats $ +0 ($193 to $203). Less sheep demand currently for oats with paddock feed increasing.
• Less need for grain feeding as the peak of the spring growth flush.
• Soils are still wet for continuing grass production.
• Plenty of quality paddock feed available.
• Barely presenting itself as the grain of choice over the spring and early summer period.

• Conditions have favoured hay growers in central SA with sub soil moisture still good and cutting expected to commence in two or three weeks. If the season finishes off well big hay yields are expected, despite crops being sown quite late.
• Trading is quiet and hay supplies are low, prices are unchanged this week after a drop of around $20/t for cereal and Lucerne hay recorded the week before.
• Straw prices remain unchanged. Any straw on farm is likely to be under contract but demand from the domestic market is fairly quiet at this stage.
• Pasture hay stocks are low and the price remains unchanged this week. Any reserves that remain on farm are largely under contract or not for sale.

• Bunbury September rainfall: 21.4mm (Ave: 81mm).
• YTD 597mm (Ave: 654.4mm), compared to 515mm this time last year.
• Heavy rains throughout the week with Bunbury 31mm and Harvey 40mm.
• Wheat: $ +0 ($302 to $312). Genuine bids to keep exports running ahead of a bigger incoming harvest.
• Feed barley $ +0 ($247 to $257). There is the expectation feed grain prices will drop significantly as harvest approaches despite poor yield prospects within sections of WA. Not as strong demand as exporters from Black Sea’s grain exporters.
• Triticale $ +0 ($250 to $260). Despite supplies remaining low triticale is not making any more than feed barley currently. There remains very little on offer at the moment with only small parcels traded.
• Oats +0 ($178 to $188). Less demand for oats as it is no longer needed for sheep feed. Sheep are instead being put into vetch crops in many places reducing the need for oats.
• Ideal conditions for the first week of September as the spring grass growth gathers momentum.
• The important central wheat belt is not doing well, with inadequate soil moisture.
• With very limited soil moisture a heavy rain is needed to prevent a quick finish to the growing season and low yields.
• Plenty of grass currently but the emphasis is on grass quality.

• Fodder producers in the key hay growing regions have had a good start to the season so far and are expecting good yields coming into this year’s harvest.
• Silage production has commenced in parts of south west WA.
• Cereal hay prices have remained steady this week after experiencing a slight drop the week prior.

• Smithton September rainfall: 0mm (Ave: 104mm).
• YTD: 710.2mm (Ave: 698.9mm), compared to 673mm this time last year.
• Very little moisture stress throughout the winter period with heavy falls each week.
• Wheat $ +10 ($365 to $375). Strong export demand for mainland wheat continues to push prices up.
• Feed barley $ +0 ($330 to $340). Barley prices are easing at the moment with exporters showing more interest in new crop purchases at present. Currently at a $20 discount to feed wheat and expected to widen out to $25 over the coming weeks.
• Triticale prices $ -5 ($338 to $348). Mainland sellers are keen to quit at current prices in case they go lower. Need to be closer to barley prices to be attractive at this current point in time.
• Oats prices $-10 ($268 to $378). With enough natural feed available the demand for oats is considerably less. Incoming crops are looking really good and there is plenty of natural feed. Market confined to manufactured horse feed.
• The key has been that Tasmania entered winter with strong swards of grass from summer and autumn growth.
• Tasmanian pastures are in great shape.
• The region is extremely wet at the moment with little tractor work possible. Winter paddock feed is still strong as the paddocks take time to drain.
• Grain has role in getting more milk from top producing cows, but the key success factor is developing high milk producing pastures.

• Prices for fodder remain unchanged in Tasmania, with demand remaining strong, and supplies limited.
• There is very little pasture hay available or being traded.
• All categories of fodder remain unchanged.