Grain – Hay Report – 13 September 2013

International & National Summary – Grain:

• International wheat prices are down for the week; futures came back as harvest progresses in the northern hemisphere and their corn crop hits the market. CBOT December 13 wheat futures ended Monday night at 641.25 USc/bu, down 12.75 USc/bu week on week.
• Estimates for global grain stocks have again increased this week with forecasters reacting to better than expected wheat yields in the US northern plains predicting this will flow over the border into the Canadian wheat crop. Southern hemisphere continues to cause concern with ABARES revising Australian wheat production for 2013/14 down 0.932 mill t to 24.47 mill t.
• The US corn harvest remains a focal point in determining international grain prices. With the harvest well underway, early reports are indicating better than expected yields. As the harvest progresses corn becomes less responsive to weather news. In the short term it is expected the US corn harvest will continue to create pressure on global wheat prices in a downward capacity.
• The Australian dollar has posted strong gains up 2.52USc this week on the back of weaker US fundamentals and increased domestic business confidence with the Liberal-Coalition being elected. Currency alone has seen the $A value of wheat fall A$7-8/t.
• Monday night saw Egypt issue their 5^th wheat tender in two weeks. Australian and US wheat continues to be uncompetitive against the Black Sea with Ukraine, Russia and Romania successful for the tender.
• ABARES released their latest Crop Report this week reducing projected output from 25.399 mill t in June to 24.467 mill t. Overly wet conditions in the Western Districts and Wimmera have reduced estimates in Victoria by 100,000mt. Dry conditions in Northern NSW and WA have also seen production predictions brought back. On the back of further solid rains in SA estimates have been lifted 1.131 mill mt severely reducing the impact on the national figure.
• Domestically the old crop remains tight in supply and thinly traded. Recent frosts in the north eastern areas of Australia have increased premiums compared to the south eastern ports. Domestic trade seems to be occurring predominately from on-farm storage. New season crop is rapidly approaching but with limited old season currently available it may be wise to secure required feed over the next month.
• It is expected old crop prices will maintain their current level until new season grain begins to roll in off the header and relieve the current supply shortage. Further positive spring weather developments could result in downward pressure on old season prices.

National Summary – Hay:

• Generally speaking for the southern half of Australia (south of Dubbo) as the new seasons fodder is becoming available fodder prices are experiencing a market correction. This price adjustment is occurring on a region by region basis as new seasons fodder becomes available, therefore regions that do not have access to new seasons fodder may not have experienced price changes. Reports suggest prices for cereal hay and Lucerne/ vetch hay have dropped significantly but these prices are fairly speculative.
• Early indications suggest that export cereal hay prices for 2013/2014 will be down on 2012/2013 depending on quality. Traditionally export hay sets the floor price for cereal hay traded on the domestic market and with big yields expected new season hay is becoming available at a lower price.
• Growers in some parts of Victoria are offering very reasonable prices for standing crops intentioned for hay. This poses a good opportunity for buyers who are able to get active and secure their fodder for 2014 now.
• Growers and buyers entering into an agreement on the sale of a standing crop should ensure they take all pre-cautions to ensure a favourable outcome for both parties. This includes agreeing and recording in writing on all aspects of the transaction before it commences.
• In Northern NSW (north of Dubbo) the season has dried off considerably, demand for hay is starting to increase from the beef industry in this region as well as drought affected areas of Queensland. There is particularly strong trading activity for new season lucerne coming out of Tamworth. Cattle grade hay was quoted at $330-350t ex farm in Tamworth.
• In parts of Southern Queensland and Northern NSW growers have taken advantage of the low hay supply and strong demand to cut frost damaged cereal crops for hay.
• The Demand for hay on the Atherton Tablelands is also very high due to the dry conditions in Western Queensland. Supplies are very low in this region and look set to decrease in 214 as Rhodes grass plantings are being replaced by sugarcane.
• Reports from around the country indicate that most of the key hay growing regions will see big yields in 2013 which will go a long way to replenishing stocks of hay that have diminished over the past two years.

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: 8mm (Ave: 4.2mm).
• 3.6mm this week through the tablelands.
• YTD: 719mm (Ave: 747). Rainfall for this time last year was 835mm.
• Wheat: $ -5 ($382 to $392). Lower off of the back of some harvest pressure. First grain coming off is all for human consumption grades, as expected. Worth waiting for lower grades to appear.
• Barley: $ -4 ($411 to $421). A bit softer as the new crop harvest approaches. But the price plus the freight this far north does not make barley attractive at all.
• Corn prices $+5 ($403 to $413). Prices up on continuing dry weather all through QLD. Possibly making old crop corn more valuable, at least in the eyes of the sellers.
• Sorghum: $ -11 ($324 to $334). Buyers waiting for new season wheat crops to come off in CQ. Hoping for some small or shrivelled grain, hence no need to buy sorghum for the tablelands.
• The whole market for dairy grains is centred on the CQ recent sorghum crop and will be until the new crop comes off and more feed quality is seen.

• Trading activity is busy on the Atherton Tableland with the cattle stations further West the most active buyers.
• There is a shortage of hay available and the supply is likely to decrease in 2014 as less Rhodes grass is available. Growers are opting for sugarcane crops over Rhodes grass as it has a more stable market outlook.
• Rhodes grass Hay – Steady- ($265-$285): Supplies of hay are lower than usual but the quality has been good.

• Toowoomba September Rainfall: 0mm (Ave: 38.4mm).
• YTD: 899mm (Ave: 499mm), compared to 477mm this time last year.
• No rain again this week through CQ, a dry pattern is becoming increasing prevalent.
• Wheat: $ -9 ($322 to $332). Still a big price premium for QLD wheat of all categories compared to NSW and VIC prices.
• Feed Barley: $ -4 ($327 to $337). Prices soften as new season barley harvest approaches. Elevated in expectation of low supply in prospect with prices capped at the Central West NSW price plus road freight into CQ.
• Corn $ +5 ($345 to $355). Prices elevated by holders of feed corn, as the dry finishing conditions continue in SQ and NWNSW.
• Sorghum: $ +0 (303 to $403). Steady again this week. Cheapest feed grain for dairy farmers and other stock feeders. Will remain so unless some off type wheat is stripped.
• Soils will prevent any crop failures, at least on the Downs soils, yields more likely to be on the lower end of the forecast.
• Probably going to be a bit more APH2 and H2 around due to a expected dry finished at opposed to last season when there was a lot of APW and ASW around than normal.

• Fodder prices have eased a little this week with the biggest activity being in cereal hay where prices have dropped a little. It should be noted that there are a number of frost damaged crops, initially intended for grain that are now being cut for hay.
• Growers are still indicating they are unsure about where the new season price will sit as baling commences in the next few weeks.
• There is still steady demand from the beef industry and there is little hay available to trade.
• Lucerne hay in bulk is hard to source but there are still active buyers in the premium market, with the horse sector and the chaff mills are paying top dollar.
• Pasture hay is 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 noteworthy rain through any dairy district of the north coast this week again.
• SFW Wheat: $ -7 ($367 to $377). Down this week on general east coast softening of grain prices at the $A began to climb to 92 US cents.
• Feed Barley: $ -5 ($376 to $386). Not overly useful in spring rations when prices at a premium to the higher energy wheat. Hopefully barley prices will begin to settle soon.
• Corn $ +5 ($385 to $395). Expensive against sorghum but not against prompt wheat.
• Sorghum: $ +0 ($322 to $332). Cheapest energy grain trucked in from the Downs. Probably will remain so for a time as most grain that will initially come off will be of human consumption.
• Last year there was noticeably for wheat of the APW and ASW varieties as opposed to the H1 and H2, this should turn back around to normal percentages of each quality.

• Demand is reported to be increasing this week, but the supply is very low. Beef producers weaning cattle and starting to run short on pasture due to the dry conditions are the most active buyers.
• Growers are still indicating they are unsure about where the new season price will sit as baling commences in the next few weeks.
• Cereal hay prices have eased slightly this week due to the lower quality of hay available and new season hay being not too far away. There are reports of frosted cereal hay being cut further West in NSW which may start to move into the North Coast if demand remains high.
• Lucerne and pasture hay prices remain unchanged due to the very short supply and therefore limited trading.

• Forbes September rainfall: 0mm (Ave: 41.4mm).
• YTD: 383.2mm (Ave: 344mm), compared to 513mm this time last year.
• No rain for the past month, crops still making progress at this stage but they are looking thirsty.
• SFW Wheat: $ -5 ($238 to $248). The wheat price is down all through eastern Australia this week. It follows strengthening value of $A to 92 US cents. Over priced now compared to feed barley.
• F1 Barley: $ +0 ($211 to $221). Now at a sensible discount to wheat, at this price it becomes the preferable commodity for spring feeding.
• Corn $ +5 ($370 to $380). Up on declining incoming wheat yield prospects for NWNSW, very little current business though.
• Sorghum $ +2 ($317 to $327). Too expensive when freighted down from Gunnedah. Would work for any local irrigated sorghum at Gunnedah farm prices.
• The current discount of wheat to barley reflects low interest in feed barley exports at this time. Better buying opportunities from Black Sea countries.
• Still very good feed quality from dryland ryegrass paddocks. Most farmers have eased back on grain usage for cows at this time.

• Demand for fodder is steady and many fodder suppliers are cleaning out stocks in preparation for the new seasons hay coming in. This may offer opportunities for some buyers.
• The main buyers are from the beef industry in Northern and Western NSW where conditions are very dry.
• With the exception of Lucerne all fodder categories remain unchanged this week. This is mostly due to the lack of supply and therefore trading activity.
• Lucerne has eased $10 this week, despite solid interest from the beef sector, chaff mills and the hobby farmer sector. The lack of premium grade Lucerne is the main reason for this.

• Bega September rainfall total: 2mm (Ave: 31.2mm).
• YTD: 354mm (Ave: 471mm), compared to 670mm this time last year.
• Barely any rain this September. Crops still have a lot of moisture under them currently.
• SFW Wheat $ -5 ($264 to $274). The price fall is pretty general across the east coast. It coincides with the $A rising in value to 92 US cents. Incoming crop prospects are currently good for SE NSW grain areas.
• Feed barley $ +0 ($239 to $249). At this discount to wheat, feed barley is favoured for use with milking cows in spring. This discount should widen when the southern grain harvest starts in November. Malting barley is being packed in contained for use in China.
• Triticale $ +5 ($241 to $251). Good buying at this price range against wheat and barley. If only part loads are offered triticale could be put in with either wheat or barley before being crushed before milking sessions.
• Oats: $ +0 ($238 to $248). Poor growth on the Monaro. Many paddocks still brown. But the dry feed I satisfactory for ewes and lambs. No oats being used currently.
• Growth is short and being kept short by grazing cows.
• If there are any fodder making opportunities for the ryegrass hill paddocks, there would need to be one or two heavy rains before the end of October.

• 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, the Southern Tablelands and the Riverina and is in short supply at present.
• Cereal hay prices have shown a significant drop and this relates to small pockets of new season hay becoming available in the Riverina.
• 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 426mm this time last year.
• Only one or two millimetres of rain this week, very patchy.
• Wheat: $ -2 ($278 to $288). At this price what does not have appeal for dairy cows over spring or early summer.
• F1 Barley: $+0 ($229 to $239). At the $47 a tonne discount to wheat, barley is clearly the grain to buy for use with cows over spring. Less grain feeding in bails with the high quality grass cows are ingesting.
• Triticale: $ +7 ($257 to $267). Only odd parcels popping up now. Sometimes less than a full semi load. At this price range it could be binned with wheat on dairy farms prior to crushing.
• Feed Oats: $ +0 ($190 to $200). Too much quality grass available for any interest in feeding oats to grazing animals.
• Crops on dairy farms with taproot systems than pastures don’t need any irrigation yet and may be taken to maturity as grain on natural rainfall.
• Some crops over the river south and west of Deniliquin at Mathoura and Bunnaloo are now stressed.

• Fodder trading is slow as early spring feed is now readily available. Prices are easing as new season hay becomes available, but would be best described as speculative as there is very little new season hay available yet.
• With early indications that this year’s export price will open similar or lower to last year, the domestic market for cereal hay has corrected with cereal hay pricing easing.
• Early cut silage has commenced in some parts of the region with good yields reported near Cohuna and Lake Boga.
• Lucerne hay prices have eased over the past few weeks and this week was no exception, this is a reflection of the lower demand.

• Sale September rainfall: 4mm (Ave: 51.6mm).
• YTD: 394mm (Ave: 422.5mm), compared to 478.1mm this time last year.
• East Gippsland received another six millimetres to Wednesday morning – Ideal for soil circumstances
• SFW Wheat: $ -1 ( $310 to $320) Prices have come back a dollar throughout the week but with the Australian dollar now at 92 US cents further falls can be expected next week.
• Barley: $ +0 ($271 to $281). At a $40 discount to wheat it presents itself as the energy grain to use on cows throughout the spring period. The discount may widen further as the incoming harvest approaches.
• Triticale: $ +0 ($287 to $297). Very little remaining stocks of old crop and is only trading in small parcels at the moment.
• Feed Oats: $ +0 ($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.
• Good opportunity for silage making and replenishing stocks that were used up over summer and autumn.
• 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.
• Local crops doing better now the surface soil water has discharged to the creeks.

• Demand for fodder has decreased across the region as spring feed becomes more readily available.
• There are some reports of pasture silage harvest commencing as early as last week.
• Cereal hay prices eased this week due to both slowing demand, and the domestic market going through a price correction as harvest approaches for new season cereal hay.
• 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 currently very difficult to source.

• Port Fairy September rainfall: 23.2mm (Ave: 72.9mm).
• YTD: 657.8mm (Ave: 564.8mm), compared to 602mm this time last year.
• Another 5-10mm of rain this week very similar to the falls of last week.
• SFW1 Wheat: $ +0 ($281 to $291) The Western district is under the influence of the South Australian grain market more than other Victorian dairy regions. There is currently minimal demand for South Australian wheat or barley domestically or in the export market.
• 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). Most of the old season stocks have been sold. Realistically there are very few parcels available and even fewer trading.
• Feed oats $ +0 ($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 despite a number of areas receiving too much rain.
• 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.

• There are reports this week that keen buyers have been able to purchase vetch cut and baled in Central Victoria, returned to South West Victoria for ensiling at $200t dry matter delivered. This very reasonable price indicates that the market could be correcting for new season fodder.
• Generally trading is slow as is typical of this time of year. Cereal and lucerne prices have dropped due to the slow trading and the market correcting in the lead up to new season hay.
• Pasture hay is now mostly unavailable and buyers are awaiting new season hay. After a wet winter pasture growth is looking promising for a good hay and silage season later in the year.

• Mount Gambier September rainfall: 17.2mm (Ave: 72.6mm).
• YTD: 575mm (Ave: 564mm), compared to 550.6mm this time last year.
• A further 21mm at Mount Gambier this week with better quality grass feed becoming available.
• Wheat $ -15 ($272 to $282). At current prices the margin to barley is favourable with strong export demand for the commodity continuing. Barley is the preferred feed throughout spring.
• Feed barley $ -7 ($225 to $235). This wide margin below the wheat price makes barley the obvious choice. Down this week in line with low export bids out of South Australia.
• Triticale $ +0 ($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. Could be binned with wheat for use next autumn and winter.
• Oat prices $ +0 ($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.
• Important to source grain from SA at this time as export bids for SA ports are lower than that of Victorian ports.
• 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 it should be noted that supply is also very low.
• Cereal and lucerne prices have dropped due to low trading volumes and the market correcting in anticipation for the new season hay.
• Pasture hay is now mostly unavailable and buyers are awaiting new season hay. After a wet winter pasture growth is looking promising for a good hay and silage season later in the year.

• Murray Bridge September rainfall: 2.4mm (Ave: 36.5mm).
• YTD: 272.5mm (Ave: 262mm). 367.7mm this time last year.
• Minimal rain this week for the first time in a number of weeks.
• Wheat $ -20 ($267 to $287). Exporter bids down $20 this week but domestic holder will not part with their remaining grain at this price. Expecting export to slip further away in the coming weeks.
• Feed barley $ -7 ($236 to $246). Not a strong demand as exporters meet competition from Black Sea’s grain exports. Strong yield prospects in the region are also putting pressure on price.
• Triticale $ +0 ($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. Still represents good buying if stocks can be found at this delivered price range.
• 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.
• Critical stage for SA crops. Further rainfall could increase potential yields but crops are also susceptible to frost.

• 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: 57.4mm (Ave: 81mm).
• YTD 633mm (Ave: 654.4mm), compared to 520mm this time last year.
• Turning out to be a quality spring for WA dairy farmers with further rains this week. Bunbury receiving 17mm, Harvey 30mm and Busselton less so with 4mm.
• Wheat: $ -10 ($292 to $302). Lower this week but feed barley is still the feed of choice.
• Feed barley $ +0 ($247 to $257). Still sitting at an enormous $45 discount to old season wheat. Not as strong demand as exporters from Black Sea’s grain exporters.
• Triticale $ +10 ($260 to $270). Not much triticale coming forward but still remains good value at $30 a tonne discount to wheat. There remains very little on offer at the moment with only small parcels traded.
• Oats +0 ($175 to $185). 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.
• Old crop prices are lower on higher incoming crop numbers.
• 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 eased a little this week with the release of the export hay prices.

• Smithton September rainfall: 26.8mm (Ave: 104mm).
• YTD: 735.2mm (Ave: 698.9mm), compared to 705.1mm this time last year.
• Wet pasture conditions continue with another 20-30mm falling over the North West coast.
• Wheat $ +0 ($365 to $375). Many farmers still using wheat until spring conditions arrive on the island.
• Feed barley $ -5 ($325 to $335). Barley prices are easing at the moment with exporters showing more interest in new crop purchases at present. Currently at a $40 discount to wheat suggests its use for late spring feeding.
• Triticale prices $ +10 ($348 to $358). 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. Wheat remains the more popular commodity.
• Oats prices $+0 ($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.
• Wednesday saw extremely cold conditions with heavy frosts overnight and snow down to 20m away from the coast.
• Autumn feed production was helped by irrigation on dairy farms.
• Grain has role in getting more milk from top producing cows, but the key success factor is developing high milk producing pastures.

• Growth has been slow and ground temperatures have stayed low. It continues to be very wet in Northern Tasmania.
• Prices for fodder remain unchanged in Tasmania. Despite demand remaining strong there is limited supply for trading and therefore prices remain unchanged.
• There were reports this week of Lucerne being shipped in from Victoria to meet demand in the premium market.
• There is very little pasture hay available or being traded.
• All categories of fodder remain unchanged.