Grain – Hay Report – 4 October 2013

International & National Summary – Grain:

• The market this week was underlined by the release of the USDA quarterly stocks report on Monday night. While the report for wheat stocks was tighter than expected, stock estimates for corn and soybeans was larger than the market had anticipated. Wheat futures rallied initially, but were then dragged down by corn dropping to its lowest price in three years. CBOT December futures ended the week up 25 USc/bu, to close on 678.5 USc/bu on Monday night. In a promising sign for prices a closing high of 683 USc/bu during the week was the highest since July 15^th. The fallout from the USDA report is positive for Australian growers implicating that wheat may well trade at a higher premium to corn than previously thought.
• Support for wheat early in the week was supported by Chinese officials suggesting wheat imports might lift another 15% to 7.5 mill t. China has shown strong interest in both Australian and US wheat as domestic Chinese wheat prices continue to hit record heights. Further gains in CBOT wheat futures were driven by frost concerns in Argentina which could result in US wheat filling the export gap into Brazil.
• Despite a peak of the $A during the week to the highest value since September 2 the dollar finished down to close at US0.9324cents. The fall of Australia’s dollar from above parity has continued to keep $A prices steady despite a decline in the US$ value of grain.
• Aside from Western Australia below average rainfall throughout Australia has eaten way at yield potential for the September period. NSW received well needed rains that potentially saved the planted crop while most parts of Victoria and South Australia received solid rainfall to maintain current yield projections. Dryness in the northern wheat belt of WA, and northern NSW and QLD will keep Australian national grain production levels well below record levels, and possibly on a similar track to last year.
• Old season crop is quickly being put on the back burner as new season crop begins to roll in off the header in significant volume in central Queensland. New season trade is beginning to kick off in these regions as growers are concluding their harvest and turning to marketing their grain. As the Australian market is concerned it is expected that old season prices will maintain current levels until new season crop begins to stem the current supply shortage. With September conditions in southern regions have maintained yield projections and there is expected to be further downward pressure on prices as harvest commences.
• There may be the opportunity to pick up old season parcels of grain before harvest commences as growers look to clean up the previous years stock. As majority of the old season domestic trade seems to be occurring out of on farm storage continue to be vigilant about quality checks.
• Despite predictions of a falling market leading into the Australian harvest period expect to see strong demand for Australian again this year. National production is predicted to be marginally bigger than last year and export demand exceeds these predictions.

National Summary – Hay:

• There will not be a hay report this week; the next hay update will take place on Friday October 12^th.

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 October rainfall: 0mm (Ave: 13mm).
• YTD: 719mm (Ave: 759). 832mm this time last year.
• No rain so far this month across the tablelands.
• Wheat: $ +2 ($344 to $354). New season wheat has the running, being trucked up to the tablelands for use in manufactured poultry feeds. Something similar could be organised for dairy farmers. All CQ wheat still human consumption quality.
• Barley: $ +8 ($405 to $415). At any price above wheat, barley doesn’t have an economic place in dairy feeds. Some production in CQ but always difficult to run it down before it’s committed.
• Corn prices $ +15 ($398 to $408). The road trains carting wheat close to the tablelands are loading with milling corn and taking it to Warwick. With a reduced local corn supply, growers have increased their release from silo prices.
• Sorghum: $ +0 ($303 to $313). Cheapest feed grain fore tableland dairy cow use, apart from any off grade local corn that is available or local grain sorghum.
• Back to normal irrigation routines, for some that means cutting and carrying green feed but no most farms there is enough summer grown feed for cows to use without having to take potential dry matter production away from growing spring crops.
• Still no low quality wheat available from CQ this harvest with no rain down there this week none is now expected.
• It takes at least two heavy rains on ripe unharvested wheat crops for grain to start sprouting and consequently quality reduction.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Toowoomba October Rainfall: 11mm (Ave: 65mm).
• YTD: 927mm (Ave: 564mm), compared to 505mm this time last year.
• A few showers across the downs this week, some places receiving up to 10mm
• Wheat: $ +2 ($303 to $313). Wheat still being trucked down from CQ and being used for stockfeed purposes, although wheat quality remains all human consumption.
• Continuing dry conditions in CQ facilitates grain being stored in paddocks on sections of old bunker covers, but not covered at night and augured up into trucks.
• Feed Barley: $ -8 ($304 to $314). Some early barley expected t be stripped west of Goondiwindi next week.
• Main harvest expected mid October. Prices in process of coming down below wheat.
• Corn $ +15 ($350 to $360). This price rise is all because tableland gritting corn is being trucked to Warwick for milling. Holders of Downs corn rationalise that if this corn can carry the $150 a tonne plus, road freight, local corn of any quality must be worth holding.
• Sorghum: $ +7 ($275 to $385). Sorghum still has the edge on other feed grains for dairy and other stockfeed uses. Some new season sorghum has been sown already and is looking for some rain this current week.
• Sown sorghum crops want a rain as they were sown into soils with little topsoil moisture.
• Freight forwarders and container packers have become more efficient to moving sorghum to export in containers. It can be switched on and off quickly as the economics of grain buying and handling alter.
• Points towards buying sorghum forward when price is attractive to dairy farmers. Stocks are no longer expected to be held for twelve months with this relatively new export mode.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Lismore October rainfall total: 0.4mm (Ave: 92mm).
• YTD: 1061mm (Ave: 1003mm), compared to 964mm this time last year.
• Dry this week again so some opportunities for potential coastal grain growers to seed a summer grain crop of sorghum or corn or both.
• SFW Wheat: $ +5 ($352 to $362). Wheat from CQ is being used for stockfeed purposes, although wheat quality remains all human consumption.
• Continuing dry conditions in CQ facilitates grain being stored in paddocks on sections of old bunker covers, but not covered at night, and augured up into trucks, without going anywhere near a silo. Hence cost saving.
• Feed Barley: $ -10 ($356 to $366). Prices heading lower as new season barley harvest is set to start in southwest Queensland and west of Moree in New South Wales.
• Corn $ +15 ($395 to $405). This price rise is all because tableland gritting corn is being trucked to Warwick for milling. Holders of Downs corn rationalize that if this corn can carry the $180 a tonne plus, road freight, local corn, of any quality, must be worth holding out for better money.
• Sorghum: $ +7 ($314 to $324). Dry soil conditions locally means some sorghum could be sown this early.
• Important coastal dairy farmers know who has sorghum sown so these local crops can be monitored for potential purchase for cow feeds.
• Fertilizers have been leached out over recent flood years. At some stage the soil nutrients need to be replaced, in the interests of better feed for milking cows.
• Sorghum is the cheapest feed grain, even though it carries a storage cost component since July for late Downs crops, and more for those stripped in April. Freight forwarders and container packers have become more efficient to moving sorghum to export in containers.
• It can be switched on and off quickly as the economics of grain buying and handling alter. Points towards buying Downs sorghum forward, when price is attractive to dairy farmers.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th..

• Forbes October rainfall: 1.4mm (Ave: 44mm).
• YTD: 440mm (Ave: 387mm), compared to 519mm this time last year.
• No rain this week but winter cops still making strong growth as crops are filling heads, after September timely rains.
• SFW Wheat: $ -10 ($210 to $220). Incoming new season wheat prospects improved by timely September rains. Drop in price probably reflects some opinions that there is likely to be some substandard wheat grades available for stock from the next or incoming harvest.
• F1 Barley: $ -8 ($188 to $198). Barley price has come down to traditional discount range below wheat. Expect strong buying of central west barley for use in northern feedlots once the harvest starts in late October or November.
• Corn $ +5 ($375 to $385). No new business heard of in feed corn for some time. Supplies limited and premium too steep for use in most stockfeeds for commercial animals.
• Sorghum $ -15 ($304 to $314). Lower with new crop sorghum prospects improved by some early sowing opportunities in the north. Probably still too early to sow sorghum locally. Needs soil temperature of 15°C to germinate.
• Dryland dairy pastures doing well. Opportunities for silage making of quality grass in surplus.
• Some reseeding of summer irrigated pastures going on, some in conjunction with laser levelling or regrading of bays.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Bega October rainfall total: 0.6mm (Ave: 51mm).
• YTD: 460mm (Ave: 523mm), compared to 691mm this time last year.
• No rain this week, but hill pastures growing strongly on t four inches or rain three weeks ago.
• SFW Wheat $ -3 ($235 to $245). Wheat still in demand by exporters. Within NSW for container packing through Botany Bay or Melbourne. Victorian wheat going to export in bulk through Melbourne and Geelong as storages are emptied ahead of the large incoming Victorian wheat harvest.
• Feed barley $ -8 ($215 to $225) New South Wales old crop feed barley process are sliding faster than Victoria feed barley prices. Barley now close to traditional discount range below wheat.
• Triticale $ +0 ($231 to $241). Supplies from old crop Victorian and eastern Riverina triticale are all thought to be committed now.
• Oats: $ +0 ($228 to $238). No interest here.
• With improved quality of grass feed on dry land hill paddocks, less need for grain to boost milk production as either crushed grain or manufactured pellets.
• Incoming southern New South Wales and Victorian grain crops are going to be heavy, boosted by timely late September falls. Wheat prices likely to remain firm till late November – possibly later.
• By then, some weather-damaged wheat may have been delivered, and this would sell at a discount to human consumption wheat, which is dominating trade at present.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Tatura October Rainfall total: 6mm (Avg: 48mm)
• YTD: 300mm (Ave: 414mm), compared to 434mm this time last year.
• Rainfalls this week were around five millimetres for the irrigation farms both sides of the river. Similar totals for dryland north east dairy farms.
• Wheat: $ +2 ($273 to $283). With massive preference for wheat in export market this is dominating the domestic market as well. Should remain more or less in place till the end of November. By that time, some new crop weather damaged wheat may have appeared to make stockfeed wheat closer in price to barley.
• F1 Barley: $-2 ($214 to $224). This makes a $51 a tonne discount to wheat based on broker and grain exporter bids. Historically this is very high. Makes barley the clear preference for home mixing.
• Triticale: $ +0 ($258 to $268) price. All triticale in northeast and through southern NSW from last crop seems to be committed and mostly delivered.
• Feed Oats: $ +0 ($180 to $190). No requirement for grain oats apart from poultry and horse feeds. Dry land beef and sheep farms all have surplus grass.
• Very good feed on dryland farms for holding dry cows away from the home dairy farms and allowing more irrigated feed to go to milk production. Silage being cut in mid Murray dairy areas, and also over the river from Echuca and west of Rochester. At this stage confined to pastures.
• August northern milk production was down 0.4 per cent on the August 2012 litres. Although a negative number, this was the best performing dairy region in Australia, relatively.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Sale October rainfall: 4mm (Ave: 58mm).
• YTD: 457mm (Ave: 480mm), compared to 502mm this time last year.
• SFW Wheat: $ +2 ($307 to $317). Next new crop what will be available about 10^th of November from northern Mallee. Till then, and probably till late November, the present wide margin in feed grain prices should continue.
• Barley: $ -2 ($255 to $265). The very wide gap in wheat and barley prices widened even further this week. Makes barley a clear preference for future grain purchase through October and probably November.
• Triticale: $ +0 ($288 to $298). It seems the triticale from the northeast old crop is all now committed.
• Feed Oats: $ +0 ($205 to $215). No requirement for grain oats apart from poultry and horse feeds. Some horse feeds manufactured in Gippsland are exported.
• Very good conditions exist for silage making from surplus pastures. Early paddocks being cut now for on north facing slopes of Baas valley at Bass. Similarly silage making in Macalister Irrigation area, possibly as a quality of pasture management tool.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Port Fairy October rainfall: 16mm (Ave: 54mm).
• YTD: 731mm (Ave: 618mm), compared to 647mm this time last year.
• Some areas experiencing significant amounts more than what has been recorded above.
• SFW1 Wheat: $ -+2 ($278 to $288). More exporter interest, at this time, for wheat than barley for human consumption purposes, meaning human consumption categories. Lesser grades of wheat are priced in steps downward as per historical margins – not supply and demand.
• Feed Barley: $ -2 ($223 to $233). $55 a tonne discount to wheat favours barley usage for next grain purchases for home mixing. This margin is exactly the difference between bids for AGP wheat and F1 barely by exporters.
• Triticale prices $ +0 ($260 to $270). Very few recent sales reported. Some part load sales, which were cheaper, due to road freight issues.
• Feed oats $ +0 ($186 to $196). Small market for grain oats for grazing animals. Incoming crops of grain oats expected to be large, unless a higher proportion is cut for hay in November.
• A Lot of capeweed now on those areas where the ryegrass was lost in autumn. Till quite recently, these wet sticky black soils could not take the spraying units to eliminate this, and other weeds.
• Wide margin between wheat and barley, favours barley for next purchases for home dairy mixes.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Mount Gambier October rainfall: 23mm (Ave: 61mm).
• YTD: 639mm (Ave: 625mm), compared to 574mm this time last year.
• Rainfall this week was a generous 39 millimetres in some parts.
• Wheat $ +0 ($249 to $259). Exporters more anxious to write business in old or new crop milling wheats than feed barley. Incoming SA wheat and barely crops could be best ever.
• Best hope for dairy farmers is late rains in November and December to reduce the quality for human consumption purposes.
• Feed barley $ +4 ($232 to $242). Old crop and new crop feed barley prices are coming together as exporters don’t differentiate this commodity at this time.
• Triticale $ +5 ($235 to $245). No recent trades in triticale reported.
• Oat prices $ +0 ($170 to $180). No immediate market for grain oats for grazing animals. Incoming crops of grain oats expected to be large, unless a higher proportion is cut for hay later this month.
• After many months of excessive rain, the recent falls have been welcomed, as they are giving guaranteed spring growth on dryland paddocks till at least the second half of October. This will take some grazing pressure off the irrigation paddocks and encourage more summer row cropping under central pivots.
• Wheat and barley prices for old and new crop are moving closer together.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Murray Bridge September rainfall: 3mm (Ave: 34mm).
• YTD: 302mm (Ave: 296mm). 380mm this time last year.
• Wheat $ -3 ($218 to $228). This premium over fed barley actually encourages wheat for use in dairy home mixes in this diverse dairy region for new grain purchases.
• Feed barley $ +8 ($209 to $219). These are bids for new season commodity. With large supplies of old crop feed barley on hand and low export interest in it, old crop and new crop values have merged.
• Triticale $ +0 ($250 to $260). This price is steady because this is all growers will be bid by major stockfeed manufacturers, for any loads offered. Sellers go to these known buyers first.
• Feed oats $ +0 ($188 to $198). No interest in any old crop feed oats to outside grazing animals. Too much grass on hand. Markets confined to poultry and horses.
• South Australian milk production was down 8.6 per cent for August compared to August 2012 liters delivered. Probably due more to wet conditions in south east than difficulties in this region

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Bunbury September rainfall: 0.2mm (Ave: 31mm).
• YTD 760mm (Ave: 685mm), compared to 581mm this time last year.
• Patches of rain across this area.
• Wheat: $ +25 ($297 to $307). Tight old crop supplies in the hands of traders is giving old crop prompt delivery wheat market strength. Wheat harvest for deliveries to Perth and southwest about five weeks away.
• Feed barley $ +0 ($252 to $262). Large discount to wheat. Favours barely usage for new purchases through rest of spring. A big discount to wheat does not mean a cheap price for users.
• Triticale $ +0 ($260 to $270). This price is steady because this is all growers will be bid by major stockfeed manufacturers, for any loads offered. Sellers go to this sink first.
• Oats +0 ($195 to $205). Being mid spring, with reasonable conditions in most grazing areas, no demand for feed oats.
• Good silage making opportunities from excess feed on pasture paddocks.
• Whet grain price movement this week showed that old crop supplies are tight and the domestic grain market is not going to slip down to new season grain values yet.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.

• Smithton October rainfall: 27mm (Ave: 79mm).
• YTD: 834mm (Ave: 778mm), compared to 774mm this time last year.
• Another week of solid rains. Barringtone received 57mm and Sheffield a further 82mm.
• Wheat $ +2 ($360 to $370). Mainland exporters to overseas countries have more interest in accumulating wheat from old crop and next crop, than trading barley for export.
• Feed barley $ -2 ($310 to $320). Very wide gap between feed barley and stockfeed wheat prices. Favours barley usage through late spring. Doesn’t mean barley is cheap – it isn’t.
• Triticale prices $ +0 ($348 to $358). Mainland supplies seem to have been sold and mostly delivered.
• Oats prices $ +0 ($268 to $378). No demand for grain oats for grazing animals.
• Mainland incoming grain crops for South Australia, Victoria, and southern New South Wales are outstanding. These are the source areas for Tasmanian dairy grains for pellet manufacture and home mixing.
• Best chances for harvest is the probability of weather-damaged wheat, not suitable for flour milling, hence priced lower.
• Weather damaged wheat supplies often take domestic feed barley price lower as well.
• August milk production for Tasmania was down 7.2 per cent on the August 2012 litres.

• There will not be a hay report this week, the next hay update will take place on Friday October 12^th.