Grain – Hay Report – 20 September 2013

International & National Summary – Grain:

• The market focus this week was directed toward the USDA report released on Thursday. It was expected the report would reveal a further drop in global ending wheat stock estimates and came as a surprise when they documented estimates as lifting by 3.29 mill t. Production issues in Australia and Argentina were ignored by the USDA with wheat estimates for both countries remaining unchanged at 25.5 mill t and 12 mill t respectively. Despite these bearish estimates for wheat CBOT December wheat futures ended Monday night unchanged from the week before at 641.25 USc/bu.
• While the USDA report was bearish on the corn and wheat markets it rallied support for soybeans and canola. As expected due to the poor August weather they cut US soybeans yields pulling 2 mill t off projected US ending stocks. Support for canola by the USDA report was underpinned by the view that oilseed demand by the Chinese would push over to the Canadian canola.
• The Australian dollar has posted further gains this week of US0.0085cents to finish at US0.9313. The fall from parity has kept Australian prices steady over the last few months but recovery in recent weeks is applying further pressure to prices.
• Abundant supplies of wheat from the EU and Black Sea having been keeping wheat under downward price pressure. Australian prices remain uncompetitive against these regions with Egypt buying a further 235,000mt of wheat from Russia, Romania and Ukraine for around US$267 CNF, well below the cost of replacement of Australian wheat .
• Domestically old crop remains in extremely tight supply with little trade activity. With limited stocks remaining in the bulk handler system trade is predominately occurring out of on-farm storage. Buying out of off farm storage can be risky, so be sure to check the quality of the grain before feeding to livestock.
• New season grain is rapidly becoming the focus as it begins to roll in off the header in central and southern Queensland. There is the potential for further downside in prices as new season grain begins to relieve the current supply shortage.
• We should expect to see strong export demand for Australian grain again this year, with some shipping slots quite heavily booked already for the new season domestic end users should expect that strong competition between the track and the delivered markets will continue into the new season.

National Summary – Hay:

• Prices remain largely unchanged this week due to the limited amount of hay being traded across most of the country. With slow hay trading, prices are speculative and difficult to accurately report, as is traditional at this time of year.
• As growers start to consider their marketing options for hay in 2013/2014 it is a good time for all buyers to lock in prices for new season fodder. Given the lack of carry over hay from 2013 and the increasing demand for purchased fodder from the dairy industry it is not unlikely that demand for hay will remain strong throughout 2014.
• Early indications suggest that export cereal hay prices for 2013/2014 will be similar to 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.
• Reports from around the country indicate that most of the key hay growing regions will see average yields in 2013. However, contractors in some regions are concerned that cash flow could restrict the amount of fodder conserved by growers in some regions. For growers who intend to cut back their fodder conservation and buy in more fodder this season it is important that they start to have conversations with their hay suppliers now in order to secure supply.
• The silage season has commenced in Gippsland and Northern Victoria and yields are reported to be average.
• Growers in South East South Australia and South Western Victoria are starting to lock up paddocks for their silage season set to commence in October.
• 60% of Queensland now drought declared and there is active hay trading in Northern NSW and Southern Queensland. Frosted cereal crops cut early for hay and cereal hay presently being cut on the Darling Downs are quickly being absorbed by the beef industry.
• Chaff mills, particularly in Central West NSW are struggling to source premium grade bulk hay, either cereal or Lucerne hay.

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.

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.

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).
• No rain this week after a sprinkle the previous week.
• YTD: 719mm (Ave: 747).
• Wheat: $ -20 ($362 to $372). Down a fair bit as the harvest starts to gather pace in CQ. All seeming to be human consumption wheat at this stage.
• Barley: $ -4 ($407 to $417). Only a hatful of barley has been sown in CQ – if that. At equal price to corn, barley does not rate a place in dairy feed.
• Corn prices $+0 ($403 to $413). This is for milling corn. Feed corn if any offered locally should be $50-60 a tonne cheaper.
• Sorghum: $ -9 ($315 to $325). This is based on sorghum grown in CQ – harvested around July and trucked to the tablelands. Cheapest feed grain of those trucked in.
• CQ wheat harvest has well and truly commenced. All wheat so far of human consumption categories, mostly AUH2 and H2. We have probably not seen the end of the grain prices slump.
• Any off-grade wheat that has been stripped wouldn’t necessarily be cheaper.

• 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 at present.
• Rhodes grass Hay – Steady- ($265-$285): Supplies of hay are lower than usual but the quality has been good.

• Toowoomba September Rainfall: 16.6mm (Ave: 38.4mm).
• YTD: 916mm (Ave: 499mm), compared to 489mm this time last year.
• Widespread rain through SEQ this week, delivering anywhere between 15-30mm.
• Wheat: $ -21 ($301 to $311). Big drop this week on the back of a substantial drop the week previous.
• Feed Barley: $ -4 ($323 to $333). Barley prices this week remain relatively unchanged. This is because the crop is not normally grown in CQ, the first new season barley is not expected in SEQ until mid Oct.
• Corn $ +0 ($345 to $355). Steady, traders are holding corn prices and waiting till grain markets show more stability.
• Sorghum: $ -11 ($292 to $302). After widespread rain this week some early sorghum will be sown on the western and nthn downs as the two commodities compete for a place in feed rations.
• This has acted as a finishing rain – averting any crop failures – at least north of the border.
• Hence improving grain security for southern Qld and for northern NSW – but there were more distressed crops in northern NSW than in southern Qld.
• Expect wheat price to go lower.

• With 60% of Queensland now drought declared there is strong demand for fodder from stations weaning cattle and from feedlots. The horse industry is also actively purchasing hay.
• Frosted wheat cut early was quickly snapped up by the beef industry. Cereal hay production has commenced on the Downs and quality is expected to be very good due to good curing conditions.
• Lucerne hay in bulk is hard to source but there are still active buyers in the premium market being 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.
• Excellent rain this week, north coast areas, 40-50mm, mid north coast 10-15mm.
• SFW Wheat: $ -15 ($352 to $362). Supply of wheat has ceased with new crop wheat from CQ running down to the down by truck still. CQ wheat doesn’t have to physically reach the north coast for prices to ease.
• Feed Barley: $ -5 ($371 to $381). Barley prices are holding high values because all old crop supplies have gone. Next new crop feed barley from the western Downs is still a month away.
• Corn $ +0 ($385 to $395). Traders are holding corn prices waiting till grain markets show more stability. Growers will be considering some late September corn sowings to get in its six month growing period.
• Sorghum: $ -10 ($312 to $322). Should be some local sowings of both rain sorghum and forage sorghum on the rain this week in dry land paddocks.
• Local farmers – dairy farmers and others – will be looking at early summer crop and forage crop options on their dry and paddocks – where they have had close to two inches.
• Rain will also give a boost to both mature ryegrass paddocks and summer active pastures. Lower prices will help dairy farmers purchasing grain. Cheapest is still sorghum.
• Monitor and new local sowing of grain sorghum or feed corn.

• Demand has been on the increase over the past few weeks, but the supply is very low. Beef producers weaning cattle and starting to run short on pasture in 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.
• Fodder prices remain unchanged this week for all categories.

• Forbes September rainfall: 43mm (Ave: 41.4mm).
• YTD: 437mm (Ave: 344mm), compared to 515mm this time last year.
• Pasture feed for cows is excellent and will now get a boost after the 54mm of rain recorded at Forbes for the week to Wednesday morning.
• SFW Wheat: $ -8 ($230 to $240). Lower as the general rain through New South Wales this week will enable all crops to finish. All old crop wheat stocks in this region are now of human consumption. Will have export potential in next grain marketing year if necessary.
• F1 Barley: $ -10 ($201 to $211). Down in line with incoming winter crop commodities in eastern Australia. Less demand for barley to export origins, than wheat. Adequate old crop supplies to new harvest in November.
• Corn $ +10 ($380 to $390). Out of kilter with other grain prices – but traders have effectively withdrawn it from sale to await price developments.
• Sorghum $ -8 ($311 to $321). Relatively steady in view of the commodity being readily available to and beyond incoming wheat and barley harvests.
• General rain has consolidated the crop right through South Australia and eastern Australia. Hence further downward pressure on grain prices exacerbating impact of higher valued Australian dollar, and high grain trading activity out of Black Sea ports.
• Current usage of grain on milking cows around Forbes is low because of the high quality grass cows have ahead of them. The grain price falls have probably not finished.
• They will need to equalize with new crop values, and critically for 70/10 wheat, which is currently not in the wheat stocks held by traders.

• Demand for fodder is steady and many fodder suppliers are cleaning out stocks in preparation for the new seasons hay. The main buyers are from the livestock industry and are seeking lower grade hay.
• Rain received this week was welcomed by growers and will give cereal hay crops a boost after they dried out quickly in late August.
• Cereal hay prices eased approximately $80 this week, as growers and buyers start to negotiate new season prices.
• Due to the lack of hay available for trading and lower demand prices for all other fodder categories remain unchanged at present.

• Bega September rainfall total: 105mm (Ave: 31.2mm).
• YTD: 457mm (Ave: 471mm), compared to 687mm this time last year.
• This was the week Bega Valley dairy farmers had been waiting for. 103mm of rain to Wed morning, saw a lot of water runoff and drain to the river and hence to the sea.
• SFW Wheat $ -8 ($256 to $266). Lower as a wide area of south eastern Australia has just received very good grain finishing rains.
• Possibility now of weather damaged wheat, if the spring rains extend into the harvest period and continue till December
• Feed barley $ -10 ($229 to $239). Discount to wheat has widened to $27 a tonne.This favours barley usage ahead of wheat. However the old crop what now held by traders and growers – mostly traders – is all of a human consumption category.
• Triticale $ +0 ($241 to $251). Unsteady on the back of feed barley, but in practice there is very little triticale left on the southern slopes or the north east of Victoria.
• Oats: $ +0 ($238 to $248). Too much feed through southern NSW for any interest in grain oats for grazing animals.
• Summer forage crops will be sown shortly without first being irrigated. Hills ryegrass paddocks will now receive a growth spurt with the topsoils saturated.
• More feed on the night paddocks to come. Much better chance of haymaking of grass paddocks in late October or November. Another rain about mid October would be ideal.
• Grain prices lower, form Victorian and NSW origins.

• Demand for all fodder categories has slowed as spring feed becomes available.
• Reports indicate that prices for cereal hay remain steady and there is some trading, mostly from growers who are clearing out 2012/2013 season fodder in preparation for the new seasons crop.
• Reported trading of Lucerne hay into the region indicated the market is sitting at around $300t delivered to Bega, this is a correction on prices quoted last week at around $250. It should be noted that there are very limited stocks of Lucerne hay available for trading.
• Growers are starting to consider their marketing options for new season fodder. With limited carry over and an increased reliance on purchased fodder from the dairy industry, buyers are encouraged to consider their requirements for the year ahead.
• Pasture hay is extremely low in supply with many suppliers indicating that they have sold out many months ago.

• Tatura September Rainfall total: 17mm (Avg: 43.5mm)
• YTD: 288mm (Ave: 366mm), compared to 432mm this time last year.
• Wheat: $ -5 ($273 to $283). Wide margin favours barley for use in bails ahead of wheat. Incoming local wheat crops doing well. Dairy farmers who have sown wheat plan to sell it at harvest, and if necessary, to buy in the required barley tonnage.
• F1 Barley: $-10 ($219 to $229). Lower again as exporters take little interest in putting together export parcels, mainly from other traders. Most growers sold most of their barley early in the year.
• Triticale: $ +0 ($257 to $267). Very little old crop triticale coming forward. New crop from north east not expected before late November.
• Feed Oats: $ +0 ($190 to $200). No interest in feed oats for grazing animals.
• All this rain sets up a good spring for irrigated and dry land farms in the north east/
• Murchison and Stanhope, each 37 millimetres, and going t have good silage and hay opportunities for ryegrass paddocks.
• Summer crops of forage sorghum and forage cornrow crops are being planned.

• Early pasture silage has commenced and good yields are being recorded.
• Heavy rain early this week was welcomed by cereal hay growers who are optimistic they will see average yields this year.
• Fodder trading is slow as early spring feed is now readily available. Prices remain steady this week after easing over the last few weeks in preparation for new season fodder which should become available in October.

• Sale September rainfall: 38mm (Ave: 52mm).
• YTD: 428mm (Ave: 423mm), compared to 481mm this time last year.
• SFW Wheat: $ -3 ($308 to $318) Low supply of non-human consumption grades of wheat. Hence ASW and APW wheat is being offered into domestic stockfeed market. Exporters have pulled back both in offers and interest for prompt shipments.
• Barley: $ -10 ($261 to $271). $47 a tonne discount to wheat points clearly to barley use for dairy cows over rest of spring. Plenty of old crop barely stock, mainly now in traders’ hands.
• Triticale: $ +0 ($287 to $297). Very little old crop commodity on offer. Expect some small parcels put on offer as northeast growers clean out silos and treat them for weevil control.
• Feed Oats: $ +0 ($205 to $215). Feed everywhere. No need for oats for grazing animals. Market now poultry and horses.
• Grain usage is low as pasture approaches their maximum daily dry matter gains. Silage strategies are being planned now to replenish siocks used over dry summer and autumn and as tools in pasture management. Hay booster fertilizers due t go out when ground conditions allow.
• Wide difference between wheat and barley prices strongly favouring barley for feed.

• Demand for fodder has decreased across the region over the past few weeks as spring feed becomes more readily available.
• Silage production has commenced in some parts of the region with good yields expected.
• Cereal hay prices remain steady this week after easing in the past few weeks.
• 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; however pasture hay is very difficult to source.

• Port Fairy September rainfall: 53mm (Ave: 72.9mm).
• YTD: 687mm (Ave: 565mm), compared to 608mm this time last year.
• 10 to 20 millimetre of rain this week through the Western District dairy areas. Grasses are providing very high quality feed for cows.
• SFW1 Wheat: $ +0 ($281 to $291). All available old crop wheat is now of human consumption quality. With a big Western District wheat crop in prospect there is higher chance of some wheat being only of feed quality due most likely to weather damage over the harvest period.
• Feed Barley: $ +0 ($238 to $248). This $43 a tonne discount to wheat means barley is the grain of choice for spring feeding.
• Triticale prices $ +0 ($260 to $270). Only a few parcels coming forward. Some part truckloads can be binned with either wheat or barley if silo space is tight.
• Feed oats $ +0 ($186 to $196). Excellent spring grazing conditions mitigate for low demand for grain oats.
• Paddocks too wet to take tillage equipment. In place of the ryegrass, capeweed has invaded the soil surface.
• Capeweed now flowering – possibly a concern for tainting of future milk deliveries. Grain usage for cows low even as more cows calve.
• Opportunities to source more grain out of South Australia, as the grain markets there are lower than in Victoria with its stronger domestic demand.

• Despite being quite wet in South West Victoria growers are optimistic for a promising silage season as temperatures increase and good pasture growth is reported.
• Some contractors are expressing concern that growers may not have the cash flow to invest in an extensive fodder conservation program this year. However many growers recognise that investing in fodder conservation or purchasing hay behind the baler in spring, is far more cost effective than paying higher prices for hay in autumn/winter.
• Generally trading is slow as is typical of this time of year, local supplies are also low.
• Prices remain unchanged this week after easing in the past few weeks. Prices have come back due to limited trading and demand for hay, and reports of new season hay coming onto the market.

• Mount Gambier September rainfall: 35.8mm (Ave: 72.6mm).
• YTD: 594mm (Ave: 564mm), compared to 554mm this time last year.
• A further 19mm at Mount Gambier this week following good rains of 21mm last week.
• Wheat $ -10 (277 to $287). At current prices barley is favourable with the margin to wide due to strong export demand for the commodity continuing.
• Feed barley $ -15 ($210 to $220). This wide margin below the wheat price makes barley the obvious choice. Came down this week in line with lower SA exporter bids. It is important to source grains out of SA instead of VIC as the current grain market is noticeably lower in SA.
• Triticale $ -15 ($215 to $225). 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 $ +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.
• Cheaper to currently source grain out of SA.
• Incoming crops in western Victoria and southeast South Australia as well as the Murray Mallee are improving with August and September 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.
• Plenty of dryland grazing options with little need to use irrigation paddocks yet.

• The coming hay seasons looks promising with good soil moisture and as the days warm up, pasture and crop growth are increasing.
• Demand for all categories of fodder has slowed significantly in the past month and 2012/13 season hay supplies are very low.
• Fodder prices across all categories remain unchanged this week after easing over the past few weeks, directly attributed to the lack of trading.

• Murray Bridge September rainfall: 25.9mm (Ave: 36.5mm).
• YTD: 296mm (Ave: 262mm). 374.2mm this time last year.
• Another good week of rain for the central districts dairy areas with most areas getting between 30-40mm of rain.
• Wheat $ -20 ($247 to $247). Export demand for wheat remains strong. Down considerably due to lower export bids but still holding a premium to barely.
• Feed barley $ -15 ($221 to $231). Not a strong demand as exporters meet competition from Black Sea’s grain exports and activity at these prices will probably see Traders taking losses on physical barley purchases.
• Triticale $ -15 ($235 to $245). Triticale fits at this price range with competing grains of old crop wheat and barley.
• 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.
• Plenty of quality paddock feed available.
• Spring growing conditions for both crops and pastures are excellent.

• The hay season has commenced for some growers in Central SA and on the Eyre Peninsula. Given it has been quite wet over the past few weeks quality is the biggest concern for growers.
• After favourable growing conditions this year, big yields are expected for this seasons hay crops.
• There is little carry over hay from the 2012 season and supplies are low.
• With no reports of active trading of bulk hay, all fodder categories remain unchanged at present, and are awaiting prices for new season hay.

• Bunbury September rainfall: 128.2mm (Ave: 81mm).
• YTD 704mm (Ave: 654.4mm), compared to 535mm this time last year.
• Another week of heavy rains through key areas of the South West.
• Wheat: $ -30 ($262 to $272). Dramatic price drop as domestic buyers fall out of the market awaiting new crop.
• Feed barley $ -10 ($237 to $247). 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. The current discount to wheat favours barley use.
• Triticale $ -15 ($245 to $255). Despite supplies remaining low triticale is not making any more than feed barley currently. New season crop prospects greatly improved this week with further rains.
• Oats -10 ($165 to $175). Less demand for oats as it is no longer needed for sheep feed.
• Big drop in grain prices as the trade attempts to adjust for new season grain.
• Plenty of grass currently but the emphasis is on grass quality.

• Recent rains have benefitted growers in the key hay regions of WA and average yields are expected this hay season.
• Silage production has commenced in parts of south west WA.
• Hay trading on the domestic market is slow and fodder prices remain unchanged this week, after softening in the previous week.

• Smithton September rainfall: 54.8mm (Ave: 104mm).
• YTD: 761.8mm (Ave: 698.9mm), compared to 718mm this time last year.
• Further rains on top of an already good spring period.
• Wheat $ -5 ($360 to $370). Strong export demand for mainland wheat continues to push prices up. Margin between wheat and barley continues to grow.
• Feed barley $ -10 ($315 to $325). Barley prices are easing at the moment with exporters showing more interest in new crop purchases at present.
• Triticale prices $ +0 ($348 to $358). Mainland sellers have dried up. Local wheat is a better proposition for cows.
• 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.
• The key has been that Tasmania entered winter with strong swards of grass from summer and autumn growth.
• Tasmanian pastures are in great shape.
• Mainland crops further improved after general rain this week.
• 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 all fodder categories remain unchanged in Tasmania this week. Despite demand remaining strong there is limited supply for trading.
• On King Island the season has also been very wet of late and the silage and hay season will commence later than usual as a result. With the local abattoir closing down for good 12 months ago, stocking rates for cattle have remained high and the demand for hay strong. Pasture hay is presently trading at about $155-$175/t ex farm.