Hay and Grain prices in Victoria and the Riverina

Selling hay or grain this week? Here’s a wrap of what you could make – and how seasonal conditions are tracking.

More rain is forecast this week, putting further pressure on hay quality. Picture: Andy Rogers

If hay growers were anticipating ideal weather to produce the much-needed high quality hay this spring, they would be unimpressed with the weather this month.

The first week of October is conventionally the ideal cutting time for cereal hay crops in the Riverina and north central Victoria. Crops are a little later this season, and the recent rain has supported dryland crops, allowing flowering heads to emerge from the stem.

Following the rain early last week, showers today through to Friday will not be helpful. This week’s forecast includes 25mm to 50mm of rain for the Goulburn Valley, which is supportive of pastures and grain fill, but not good for hay making.

The average maximum October temperatures for the Mallee are 21C to 24C.

However, this week temperatures were forecast to just exceed 20C yesterday and today and maximum temperatures for the remainder of the week are forecast to reach only 15C to 18C.

Hay growers can take some comfort from the windy weather, which will aid the drying of soils and windrows, but cool weather and big biomass crops laying over moist soils will extend the drying of windrowed hay.

As the first hay crop cut, vetch stands to suffer the most from the rain.

Many vetch crops had matured and were about to start podding just prior to the rain at the end of last month.

Many growers took the option to cut early to capture the quality when crops hit optimum maturity.

However, colour and nutrients have been lost from the thin leaves and stems during the extended rain period.

Prices for these lots of lower quality vetch are being negotiated, but the price for canola meal is particularly attractive this year, especially in terms of discounts to imported soyabean meal.

If crude protein was the only criteria to compare canola meal and vetch hay, the new season’s canola meal price of $455 a tonne ex-plant would cap the price of vetch hay with 20 per cent protein at $265 a tonne ex-farm.

The area of cereal crops intended to be cut for hay was already down 30 to 40 per cent from last year and both buyers and sellers are keen to see some new season’s hay with better quality than the prolific volumes of carry-over stocks that remain in sheds.

Some early oaten hay in the Mallee has been baled already, but quality has been disappointing with signs of mould appearing in bales.

While most hay growers may have avoided cutting hay until now, they will have little option but to cut them and face the unavoidable consequences of the rain during the next week or two.

Export hay growers are facing similar dilemmas in both Western and South Australia. Given the weather pushing out curing periods to between three and four weeks, the hay sector may need to wait longer for plentiful supplies of high-quality hay.

GOLDEN YEAR FOR AUSSIE CANOLA, BUT CANADA’S CROP SHRINKING

COOL and showery conditions are proving ideal for the final stages of crop development in southeastern Australia.

Canola crops are podding and looking good. Some irrigated crops near Kerang have had 600kg of urea applied during the season and growers hope for yields of 4 tonnes a hectare.

Other dryland crops between Donald and Charlton have enjoyed a positive season and growers are expecting yields between 2.5 and 3 tonnes a hectare.

The canola harvest in Saskatchewan is now complete and the provincial government’s September estimates show that yields have declined from a 10-year average of 1.9 tonnes a hectare to 1.18.

Analysts estimate that Canadian canola exports will fall to 6.5 million tonnes following the 2020 exports of 11.7m tonnes and the five-year average of 10.4m tonnes.

Victoria’s canola crops are off to a promising start. Picture: Zoe Phillips

Canola futures traded on the Winnipeg exchange settled last week at Canadian $915.70 a tonne. The January contract did touch C$900 a tonne in mid-July but that recent price is a new seasonal record for the exchange.

Drought in North America may have initiated that rise, but it is the external oil markets that have driven prices to those new highs.

Since the start of the year, soyabean oil markets have increased 59 per cent and crude oil prices have spiked 68 per cent.

Soaring natural gas prices in the northern hemisphere and restricted production from OPEC+ crude oil producers have helped to create this tightly supplied energy market. Trader bids for canola are up again, increasing $22 a tonne to $982 a tonne on a Geelong port basis.

This price increase was supported by a $30 a tonne lift in Winnipeg futures and a $39.50 a tonne rise in rapeseed futures on the Paris exchange.

Continual rumblings of further restrictions to exports of Russian wheat and import demand are driving up wheat prices.

The strong increase in energy prices is also supporting wheat markets as higher energy costs are linked to higher fertiliser prices and the price of diesel.

Exporters of containerised grains and pulses are encouraged by the trends in the cost of shipping. Last week the cost of shipping a 40-foot container on the lucrative Shanghai to Los Angeles route fell 8 per cent or $1366 a container to $15,272. That was enough to ease the Drewry World Container Index by 2.2 per cent.

Exporters are optimistic that the trend will continue and the container freight rates will be as much as $20 to $30 a tonne lower next month.