Hay and grain outlook: Wet weather continues to wreak havoc
At the start of the month, hay growers were relaxed with their crops still standing. But closer inspection has revealed significant quality issues.
At the start of this month, oaten hay growers were relaxed.
At the start of this month, oaten hay growers were relaxed.
Although the season was much later than normal, their crops were still standing and they remained confident they could cure windrows in the warmer sunny weather of November.
As the bulk of the oaten hay crop of the Riverina and Victoria was cut last week, that
optimism has changed.
Paddocks of curing hay received 20 to 40mm last week and there are forecasts for similar
rains again this weekend.
Windrows of curing hay have begun to show signs of black spots.
Given the warm and damp weather, the colour and nutritional value of this year’s hay crops is looking poor.
Those growers who did cut vetch in October have managed to bale some paddocks last week.
While this hay has not been tested, it is not expected to be marketable as it has received more than 190mm of rain and is dark brown to black in colour.
Few dairy farmers will consider this hay and some beef feedlots may entertain feeding it at a
discounted price.
The weekly storms and rain are destroying the enthusiasm for making hay, and growers have not seen a year like it in their lifetimes.
Those vetch growers who decided against cutting their paddocks for hay are also considering abandoning any cutting of their residual oat paddocks.
Growers report oat crops cut for hay in the Boort, Donald and Charlton districts are rare as
more growers are retaining oat crops for harvesting as grain.
There is little hay trading, but prices are broadly expected to rise.
Growers know how scarce hay is shaping up and are offering old season rain damaged oaten hay at $300 ex northern Victorian farm.
Livestock producers and hay growers in southern Victoria are also worried about their hay
production.
Paddocks that were shut up from grazing animals last month are now tangled and rank.
Some are trying to reduce the bulk in the paddocks with stock and hope to bale pasture hay when paddocks dry out in January.
When hay supplies are tight, the demand will focus on affordable sources of protein and fibre.
Although vetch hay supply is estimated to be less than 10 per cent of normal, protein for ruminants may be available from canola meal, downgraded pulses and lucerne paddocks
that have escaped the floods.
Even the quality of cereal straw could be challenged as barley crops are reportedly lodged and wheat crops have become heavily infected with rust in the past month.
GRAIN TALK
Wet weather is starving the market of wheat and the burst of barley harvest may be short lived.
Last week brokers reported that harvest south of the Murrumbidgee River was getting into gear and barley was starting to hit the market.
Barley growers are keen capture some of the November premiums for prompt delivery as the harvest has been delayed due to wet weather.
Harvest saw barley deliveries push prices down BAR1 grade feed barley which opened the week down $7 a tonne at $407 delivered to Melbourne buyers.
However, the continual wet weather delays have pushed domestic wheat up again.
Prompt delivery for APW and ASW grades of milling wheat are both $20 a tonne higher in the Victorian market.
Some growers remain confident that wheat is filling well, adding yield potential with each
additional ripening grain in the head.
Others can see the impact of the ongoing boggy conditions and notice a lowering of the grain count from each head.
While grain yields and quality are still unclear, a shortage of milling quality cereal grains is evident in prices.
Malting quality barley in the Port Kembla port zone has reached $534 a tonne on a port basis. This is a massive $107 a tonne premium over the malting barley price in the Geelong zone and $190 a tonne premium over the price of BAR1 grade feed barley in the Port Kembla zone.
Shortages for maltsters in Queensland and NSW will ensure that the drawing arc for malting barley will run deep into Victoria and South Australia this season.
Other than the weather induced spikes in prices, export destined bids are reflecting the
weaker international markets.
Benchmark wheat futures markets in both Chicago and Paris exchanges were down $18 a tonne.
There are continuing plans to negotiate a new deal this month for the Ukraine grain
corridor through the Black Sea.
This would benefit buyers eager to see more supply hit the markets. Currently Russian wheat is the cheapest for North African and Middle Eastern buyers.
A report from the US Department of Agriculture last week left their estimated production
for Russian wheat for the current season unchanged at 91 million tonnes. But traders continue to peg the crop much higher.
In its October 20 report, the London based International Grains Council estimated Russian wheat production at 95.4 million tonnes.
It’s also been a volatile week for exchange rates with the US dollar rising sharply against
other key currencies.
Signs that the US Federal Reserve’s efforts to bring inflation back under control appear to be bearing fruit with lower consumer price index reports.
Accordingly, the Australian dollar has shot up 2.5 US cents and was trading earlier this week at 66.75 US cents.
Local weather remains a major factor.
Canola is expected to be windrowed in northern Victoria this week and more rain is forecast this weekend.
‘There’s no bell that rings when we are at the top’
Hay prices have steadied after eight weeks of rises, but fresh cuts won’t arrive until October. See all the market details and prices here.
Forecast rain sparks hope for strong barley yields at Moolort
Rain this week could be just what a crop of barley at Moolort needs to reach a yield of 6 tonnes a hectare. Graeme Evans is optimistic about the forecast.