Grain – Hay Report – 11 October 2013

International & National Summary – Grain:

• The last week has seen increased volatility in the market as US agricultural markets continue to trade blind with ‘non essential’ US government services including the USDA being indefinitely suspended. The US congresses failure to pass the proposed budget means no USDA WASDE reports or weekly export figures to substantiate rumours within the trade.
• Wheat figures rallied to their highest price since July last year, CBOT December futures ended the week up 16.25 USc/bu to close at 694.75 USc/bu. We can expect further volatility and price movement until the US government returns.
• The rise in the Australian dollar over the last four weeks from 87.99 US cents to it’s current position at 94.08 US cents has cancelled out the lifts in futures we have seen in the same period. Currency and basis are currently off setting any gains we are seeing in the US futures.
• Wheat gained strength this week as strong competition in the export market increased demand. Tenders were issued by Iraq, Bangladesh, Algeria and Jordan totalling 350,000t. Brazil remains a strong buyer in the US market and China continues to be a strong presence, despite difficulty in calculating the extent without US export figures.
• A domestic focus sees the Australian wheat market currently in transition between a forward market and a harvest market. We would expect basis levels to come under pressure as our harvest gathers price. On the flip side there may be potential to gain some strength from the US futures prices as northern hemisphere market moves further away from their harvest market pressures. Production in the south of Australia continues to look promising while the growers in northern New South Wales are beginning to start harvesting.
• Trade of new season grain is picking up speed as the harvest rolls through Queensland into northern New South Wales. Growers are content to sit on harvested grain at current rates forcing feedlots and domestic users to pay premiums to the market to guarantee supply. 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 having maintained yield projections 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.

National Summary – Hay:

• Silage and hay production is underway for the 2013 season and there is a lot of interest in fodder conservation this year.
• Across the country the current market for hay trading is best described as variable. With new season hay starting to become available and being traded actively in some regions, we are starting to get an early indication of new season prices.

Northern Australia:

• In Queensland and Northern NSW, the market appears to be firming and there is active purchasing behind the baler. This is a result of the ongoing dry conditions which have fuelled steady demand for most of the year.
• In these regions there has been interest in baling cereal as an alternative to grain, as crops are quickly drying out and not filling well and may be more lucrative as a hay crop than grain.
• Active trading into this region will keep fodder prices firm at least in the short term.
• Strong demand for fodder from right across Queensland is likely to start putting pressure on demand for fodder in the Southern states when more new season hay becomes available, at least until decent rains are recorded and/or the drought breaks.

Southern Australia:

• Presently in Southern Australia demand is slow and best described as ‘hand to mouth’. Buyers are trying to save cash and hold off on hay purchases in anticipation of new season prices.
• While prices remain firm at present, there may be room for the market to soften a little in the coming weeks, as big hay yields are expected this season.
• Quality will have a big impact on hay prices in Southern Australia and as baling cereal hay commences in the next few weeks, we can expect to have a clearer indication of new season pricing soon.
• In South West Victoria there has been interest from buyers purchasing vetch behind the baler (from the Wimmera) in order to secure winter feed for 2014. It is unlikely there will be an oversupply of vetch hay in 2014 as Mallee crops have suffered due to dry conditions and in South Australia some vetch crops were affected by strong winds upsetting windrows in the last week.

Western Australia:

• In South Australia and Western Australia big hay yields are being reported however quality is variable and mostly well down on the past few years.

• Given the variability in the market at present growers are considering their options for marketing new season hay and will be re-stocking their own sheds before trading any hay.
• Buyers who rely on purchased fodder are well advised to start talking to their hay suppliers now, in order to secure their 2014 fodder supply. Particularly buyers who are seeking vetch as vetch supplies may again be limited in 2014.
• With big yielding cereal crops expected we will see a lot of variability in the quality of hay produced this year. Buyers are well advised to get feed tests before buying 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.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: 17mm (Ave: 13mm).
• YTD: 736mm (Ave: 759). Compared to 840mm last year.
• Patchy rain through the tablelands this week.
• Wheat: $ +3 ($347 to $357). Wheat in strong demand from exporters from all Australian ports. Any local corn or sorghum should be run down to save freight.
• Barley: $ -5 ($400 to $410). No point in buying barley whenever its price rises above that of wheat due to the lower energy in feed barley. Some farmers do pay a small premium at times when acidosis poses a problem. Barely harvest has commenced in south-western Queensland.
• Corn prices $ +0 ($413 to $423). Corn is very mobile at the moment with Tablelands corn going down to Warwick as dairy farmers out bid millers for Downs’s corn.
• Sorghum: $ +5 ($308 to $318). Cheapest grain to buy if long haul freight is involved. Search for any local sorghum – it will be about $100 a tonne cheaper than our given price range.

• Demand remains strong for hay, with the cattle stations in drought affected Western Queensland the most active buyers.
• Supply is very low as it is now coming to the end of the traditional hay season and the dry conditions in Western Queensland have put pressure on the market for most of 2013.
• Given the supply shortage there is a lot of variation in the hay available. Lower grade, older hay remains steady trading around $240/t ex farm and higher grade hay firming about $10 this week to $275/t ex farm. There are still some small quantities of premium grade hay mostly trading in small squares for around $11 a bale. Premium grade hay in bulk is difficult to source but trading at around $380t ex farm where available.
• Hay is moving big distances and therefore freight is adding considerable cost for buyers. Prices quoted this week are ex farm as opposed to delivered so as not to confuse the market.

• Toowoomba October Rainfall: 11mm (Ave: 65mm).
• YTD: 927mm (Ave: 564mm), compared to 505mm this time last year.
• Wheat: $ +2 ($305 to $315). Tight finish to wheat crops is helping to firm prices. Expectations of high protein downs wheat following lower than hoped for yields. A wet harvest would be bring stockfeed prices down but this seems unlikely.
• Feed Barley: $ -5 ($299 to $309). New season feed barley now being stripped west of Goondiwindi. So premium over wheat has gone. Feedlots can get back to their preferred feed for use of Japanese destined carcasses.
• Corn $ +0 ($350 to $360). Corn is very mobile at the moment with Tablelands corn going down to Warwick as dairy farmers out bid millers for Downs corn.
• Sorghum: $ -5 ($270 to $280). Stored Downs sorghum is down this week as new season barley from Goondiwindi area and further west is stripped and can be loaded out of paddocks.
• We expect much of it to be light weight – but higher in grain protein. Prudent to specify the quality of feed barley you are buying.
• F1 has minimum test weight of 62.5 kilograms a hectolitre. F2 has minimum test weight of 60 .0 kilograms hectolitre.
• Test weight should be checked before tipping grain on receival.
• If light weight reuse delivery or negotiate a lower price, proportionate to the lower test weight reading.

• Demand for all fodder types remains strong throughout Queensland as 60% of the state is now drought declared. Cattle stations in Western Queensland are the most active buyers and for these buyers freight is adding considerable cost to hay purchases.
• Despite new season hay now becoming available, quantities are limited and overall the supply of hay is low. This is due to the dry conditions across the state putting increased pressure on the fodder market.
• Some new season hay is of variable quality due to weather damage at baling.
• New season cereal hay is seeing the most active trading at present. Lower grade weather damaged hay has stayed fairly steady at around $250 – $275/t delivered. Higher grade new season hay prices have firmed, trading at $270-360/t delivered as buyers compete to source it.
• New season Lucerne hay is very hard to source, particularly in bulk and there is active trading behind the baler. Second grade hay is trading at $325/t ex farm but higher grade chaffing hay where it can be sourced, remains firm, upwards of $400t.
• NB: Prices are estimated to be as delivered locally unless otherwise stated.

• Lismore October rainfall total: 0.4mm (Ave: 92mm).
• YTD: 1061mm (Ave: 1003mm), compared to 964mm this time last year.
• SFW Wheat: $ +4 ($356 to $366). Tight finish to Downs wheat crops is helping to firm prices. Expectations of high protein Downs wheat following lower than hoped for yields. A wet harvest would be probably bring stockfeed prices down but this seems unlikely on current weather conditions through Queensland.
• Feed Barley: $ -10 ($346 to $356). New season feed barley now being stripped west of Goondiwindi. Some traders expect this to be lightweight so check it. Liverpool Plains not expected to be a barley supply source this year.
• Corn $ +0 ($395 to $405). Corn is very mobile at the moment with Tablelands corn going down to Warwick as dairy farmers out bid millers for Down’s corn. Riverina corn coming up to Tamworth, some of which may come down to the costal dairy strip.
• Sorghum: $ +0 ($314 to $324). Downs sorghum was up but not down here. Reason is Liverpool Plains sorghum soils are parched. No chance of sowing in October, as they like to, for a January harvest.
• Barley yields low and typically barley is sown after wheat in rotations with less stored soil moisture and lower nitrogen status. Expect lightweight grain and check regularly for it.
• Grain sorghum is an important component of dairy feeds and the stored commodity is being used in feeds now, and being shipped out in containers.
• New crops sown on thee Downs are struggling. No chance of sowing dryland crops in northern and northwest New South Wales. So northern grain markets are expected to remain strong until heavy rains change this outlook.

• Baling has commenced for some early cereal and vetch hay crops. Conditions have been favourable for growers and the quality is good.
• There is steady demand for new season hay from the beef and dairy sectors as old season hay is in short supply.
• Supplies of all fodder types are limited and will remain tight until new season baling commences in earnest in the next 4-6 weeks. Early indications are that prices will start to ease when new season fodder is more readily available.
• Prices remain largely unchanged this week, due to the continuing steady demand. The exception is Lucerne hay which dropped $50 this week, likely a result of some first cut lucerne hay and new season vetch coming onto the market.

• Forbes October rainfall: 3mm (Ave: 44mm).
• YTD: 440mm (Ave: 387mm), compared to 525mm this time last year.
• SFW Wheat: $ +10 ($220 to $230). Up in line with all of the southern Australian export. Port buying continues for both old and new crop.
• F1 Barley: $ +5 ($193 to $203). Up as northern crops are going to be lightweight with high protein.
• Corn $ +5 ($380 to $390). Corn has firmed in all NSW areas as conditions for sowing summer crops in the north has deteriorated.
• Sorghum $ +2 ($306 to $316). Too expensive if freight from northern production area is included. Any local sorghum is a different matter.
• Two mornings may have caused crop losses. The real damage will start to reveal itself in ten days or so.
• A good rain for grain crops within ten days would boost yield prospects, without it they will quickly dissipate; crops are currently drawing moisture from a depth.
• And many soils have poor moisture reserves to begin with.

• 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.
• Recent rain 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 last week, as growers and buyers started to negotiate new season prices. This week due to the lack of hay available for trading and lower demand, prices for all fodder categories remain unchanged.

• Bega October rainfall total: 7mm (Ave: 51mm).
• YTD: 466mm (Ave: 523mm), compared to 734mm this time last year.
• SFW Wheat $ +10 ($245 to $255). Wheat from all southern Australian ports is in strong demand from all major exporters. Prices should remain firm over the next month.
• Feed barley $ +5 ($221 to $231). Modest discount to wheat in the dairy region. Opens up either grain for next purchases.
• Triticale $ +0 ($231 to $241). Old season stocks seem to have disappeared from both NSW and VIC sources.
• Oats: $ +0 ($228 to $238). No appeal for oats particularly when a high freight component is involved.
• Good growth still – hopefully grass haymaking prospects in round bales.
• Summer forage crop sowings are in progress on the river flats as soil conditions allow.
• A few shortages are delaying some of the planned grain movements into the valley and other coastal dairy clusters.

• 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 season’s crop.
• Reported trading of Lucerne hay into the region indicated the market remains steady at around $300t delivered to Bega. 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 October Rainfall total: 9mm (Avg: 47.5mm)
• YTD: 301.2mm (Ave: 413.2mm), compared to 463mm this time last year.
• Wheat: $ +10 ($281 to $291). The price rise this week is on the back of increased export demand.
• F1 Barley: $+5 ($212 to $222). Prices have come off $20 in the last week as exporter demand fades.
• Triticale: $ +0 ($250 to $260) No longer readily available. Good buying at any discount to a genuine feed wheat price.
• Feed Oats: $ +0 ($180 to $190). Oats completely off the radar at the moment as they are not required for any form of animal grazing.
• Hay cutting expected to start in the coming week.
• Dry country feed is quickly drying off.
• Barley at this price discount is appealing against wheat and feed corn.

• Silage has commenced and good yields are being recorded.
• Cereal hay growers are optimistic they will see good yields this year.
• Fodder trading is slow as early spring feed is now readily available. Prices remain unchanged this week.

• Sale October rainfall: 12mm (Ave: 52mm).
• YTD: 459mm (Ave: 423mm), compared to 512.12mm this time last year.
• A further 10-30mm throughout the week.
• SFW Wheat: $ +0 ($307 to $317) the premium to feed barley is now out to $62 tonne with little genuine old crop wheat being offered.
• Barley: $ +0 ($255 to $265). Barely prices continue to drop, equating to $17 downfall in the past month.
• Triticale: $ +0 ($288 to $298). Old crop is almost completely gone now. Pricing is currently based on a new crop prices for a late November delivery.
• Feed Oats: $ +0 ($205 to $215). Feed everywhere. No need for oats for grazing animals. Market now poultry and horses and that It itself is extremely limited at this time of year.
• Further rain is perfect as local grass pastures reach their annual maximum daily dry matter production peak.
• Grain feeding is continuing but at very low levels with natural pastures in abundance.

• Demand for fodder remains slow but steady, with cereal hay and straw bringing the most interest.
• Early silage production has commenced in some parts of the region, good yields and quality are being reported so far.
• With good spring growth and a lack of carry over fodder from 2012, there will be a lot of interest in fodder conservation in 2013.
• Fodder prices remain unchanged this week due to the slow trading.

• Port Fairy October rainfall: 17mm (Ave: 72.9mm).
• YTD: 732mm (Ave: 565mm), compared to 662.2mm this time last year.
• A general rain this week has recorded a further 20 to 30mm in the rain gauge for most dairy areas.
• SFW1 Wheat: $ +8 ($286 to $296). The limited old crop wheat on hand is all human consumption categories.
• Feed Barley: $ -2 ($223 to $233). Barely is at an astounding $85 a tonne discount to wheat means barley has a clear appeal for cow feeding this spring.
• Triticale prices $ -8 ($252 to $262). Seemingly no old stock remaining as current prices reflect 13/14 grain for a November delivery.
• Feed oats $ +0 ($186 to $196). The only interest in Oats at the moment is from graziers buying oats for drought reserves as they are priced cheaply.
• Further rains leave the incoming crops looking great approaching harvest and are put roughly a fortnight behind the Wimmera crops.
• Dry summer has caused loss of perennial pasture grasses.
• Grass remains short in length on most dairy and beef properties.

• With very little hay of any variety available many will be keen to make the most of a good spring and re-plenish their fodder supplies.
• There is very little fodder being traded in South West Victoria, with some taking advantage of falling grain prices to fulfil their requirements until there is more certainty in new season fodder prices.
• There are some small quantities of vetch silage (wrapped or chopped) presently being cut in the Wimmera. It is reported that baled and wrapped silage delivered to South West Victoria is trading at $230-260/t DM delivered.
• Across the other fodder categories this week prices remain unchanged, primarily due to limited trading and demand for hay.

• Mount Gambier October rainfall: 25.6mm (Ave: 61.1mm).
• YTD: 641.4mm (Ave: 564mm), compared to 586.2mm this time last year.
• Mount Gambier had a further 16mm in the past week. South East crops had only 3-4mm during the week.
• Wheat $ +10 ($259 to $269). Good exporter interest in wheats from all Australian states this week.
• Feed barley $ -2 ($230 to $240). Both South Australia have dropped $2 a tonne this week. Probably better to buy barley from Victorian sources where the discount is at a larger spread.
• Triticale $ +0 ($235 to $245). Trade has stalled with no old crop stock remaining. Published price reflects new season price for a November delivery.
• Oat prices $ +5 ($175 to $185) 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.
• With large incoming crops expected throughout South East, Wimmera and Western District of Vic the grain protein in feed grain should be lower than last.
• Problems associated with soft paddocks and pugging have now gone.

• 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 there is very little trading at present. Some buyers are taking advantage of falling grain prices while they wait for new season fodder and more competitive prices.
• Fodder prices across all categories remain unchanged this week, directly attributed to the lack of trading.

• Murray Bridge October rainfall: 2.0mm (Ave: 33.5mm).
• YTD: 301.4mm (Ave: 262mm). 381.2mm this time last year.
• For the first time in a few weeks it was relatively dry throughout the district. Murray District recorded 2mm while Victor Harbour got a little more in 10mm.
• Wheat $ +10 ($228 to $238). A slight rise due to export demand increasing throughout the week. Winter crop is almost home and maintaining quality is the main concern.
• Feed barley $ -2 ($199 to $209). Both SA and VIC exporter bids have dropped $2. Probably better to buy barley form Victorian sources where the discount to wheat is larger.
• Triticale $ +0 ($250 to $260) Supply is limited and very little if any is being currently offered.
• Feed oats $ +5 ($193 to $203). Less sheep demand currently for oats with paddock feed increasing.
• Barley is the preferred grain for spring cow feeding.
• Best outcome for dairy farmers currently would be a wet harvest period with December rain spoiling unreaped South Australian wheat.
• Dry and warm weather has brought forward oat mowing for hay.

• 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, with some mixed grade hay expected.
• After favourable growing conditions this year, big yields are expected for this seasons hay crops however quality may be average.
• 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 October rainfall: 14.8mm (Ave: 30.9mm).
• YTD 774.8mm (Ave: 685.3mm), compared to 581.6mm this time last year.
• More rains this week in dairy areas. 12mm at Bunbury and throughout the region has seen the dryland pasture season extended.
• Wheat: $ +10 ($307 to $317). Exporters are bidding for new crop wheat and this is taking old crop supplies up to the new crop levels. Currently a $50 premium to feed barely.
• Feed barley $ +0 ($252 to $262). Large discount to wheat encourages its use in dairy feeds.
• Triticale $ +20 ($280 to $290). Very little trade occurring with stocks exhausted.
• Oats +10 ($205 to $215). Less demand for oats as it is no longer needed for sheep feed.
• Grain crops are still about a month away from harvesting.
• Plenty of grass currently but the emphasis is on grass quality.

• Given it has been quite wet over the past few weeks quality is the biggest concern for growers, with some mixed grade hay expected.
• 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 October rainfall: 30.8mm (Ave: 78.9mm).
• YTD: 778.8mm (Ave: 777.8mm), compared to 778mm this time last year.
• Solid rains continue throughout the dairy regions of Tasmania. 15-25mm of rain falling on already wet soils.
• Wheat $ +0 ($360 to $370). Wheat bidding is strong in all southern Australian export ports.
• Feed barley $ +0 ($310 to $320). At a $50 discount to wheat, mainland traders pushing container trade direct to dairy farms in the region.
• Triticale prices $ +0 ($348 to $358) Low mainland supplies with less triticale grown this season in general.
• 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 wet conditions have delayed a lot of the cropping on dairy farms.
• Wide margin of wheat and barely encourages the use of barely for local dairy farmers.

• 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.