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Dairy Australia - Hay and Grain Prices

09 April 2014

Dairy Australia - Hay and Grain Prices - Week Ending 4 April 2014Dairy Australia - Hay and Grain Prices - Week Ending 4 April 2014

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.
Dairy Australia - Market News

International & National Summary - Grain:

  • International values were relatively unchanged throughout the week with the much-anticipated USDA quarterly stocks and planting report having minimal impact. Historically this report has caused severe volatility, as it tends to differ greatly form the trades expectations. This year the published results were inline with the markets beliefs and had a neutral effect on global wheat prices. CBOT May wheat futures fell A$11/t to finish A$276/t on Tuesday night. The slight decline in international wheat values was heavily exacerbated by a rising Australian dollar. The Aussie dollar gained 1.47USc to close at 92.72Usc.

  • Crop conditions across the globe are the firm focus and the predominant factor that will drive international markets in the coming months. US winter wheat regions remain dry and are desperately seeking rain if they hope to maintain average yields. The dry conditions are currently pushing Australian prices up. Rainfall is increasingly important in the coming weeks, as the spring period is a key growth period for the US winter wheat crop.

  • In the Black Sea region the Ukraine crisis has subsided as Russia reduced their military presence with business seemingly commencing as usual. The global market has averted their attention from the political turmoil and is instead focusing on fundamentals including planting progress throughout Russia and local crop conditions. This saw the market drop off as it reclaimed the gains the Ukraine crisis caused initially.

  • The slight fall in international values was intensified domestically with a number of local factors causing prices to ease. Recent rainfalls throughout Northern Australia have softened demand and bropught back prices. The rain was widespread and will give growers confidence coming into planting. The rain was welcome news for consumers with price relief for feed well overdue. The rain has also caused damage to the incoming Sorghum crop with large proportions now expected to graded SOR2 or lower. This should see larger quantities enter the feed market, as it will not be fit for export. Little sorghum is entering the bulk handling system and any purchases will have to be executed ex-farm. Remain vigilant around quality checks and ensure you are purchasing what you intend to.

  • Similarly in the southern states rainfall throughout the last week has seen feed grain values come under pressure. Confidence in the new season garnered from the recent rains has seen many growers willing sellers of old crop. The increase supply has been met with limited demand. Much of the Trade have covered their requirements with no need for aggressive grain acquisition. If further rains are experienced towards the end of the month expect a steep decline in prices and potentially the opportunity to pick up remaining grain requirements at cheaper values.

National Summary - Hay:

  • Trading of hay has continued at a steady pace in most regions this week.

  • Despite good rain, growers in drought affected regions are still trying to source feed to hold them over until paddock feed becomes available.

  • In some regions, particularly the New England of NSW, this rain may be too late as cooling ground temperatures could restrict pasture growth. These buyers are actively trying to secure winter feed from the Northern NSW Coast and Southern regions.

  • The Burrambuttock to Bourke hay drive is on again this weekend with some 50 loads of hay expected to arrive in Bourke on Saturday. This hay will assist drought affected livestock producers in Western NSW.

  • Rain has stopped lucerne hay production for many producers in irrigated regions of Victoria and NSW. With the lucerne hay market already hand to mouth it is likely that supplies will be very tight in winter.

Northern Australia:

  • Hay supplies remain tight with supplies being sourced from Victoria and South Australia to meet demand. Feedlots are active buyers.
  • Due to good rain some growers should be able to plant their cereal crops for grazing and/or fodder in the coming weeks.

Southern Australia:

  • Trading remains fairly steady this week. Demand from Northern buyers continues to generate competition in the south. Local demand however is slow.
  • Protein hay will be short in 2014. Recent rain will add to this, slowing lucerne production in the coming weeks.
  • The summer crop (maize, millet and sorghum) silage harvest currently underway.
  • There are good supplies of low grade hay available, likely to be available throughout the winter.

Western Australia:

  • Demand for cereal hay and lucerne from dairy farmers and livestock producers remains steady in the South West.
  • There are good supplies of cereal hay from the 2013 harvest, however quality is variable.
  • Straw supplies are well above average and quality is good.

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