Hay & Grain: Hay growers’ worst fears realised
The curing weather hay farmers were hoping for this November hasn’t arrived, leaving farmers to abandon their crops or cut very green grass.
Some hay growers’ worst fears have become reality.
Some hay growers’ worst fears have become reality.
The regular rain of September and October have delayed cutting, but growers and others in the fodder industry had reasonably assumed fine curing weather would return in November.
All crops of cereal and pasture hay cut before the middle of November have been hit with
between two and five rain dumps and all hay cut in southeastern Australia since then were
exposed to 20 to 30mm of rain last weekend.
The forecast for this rain was enough for some growers to abandon their plans to cut hay.
Oat crops in north Central Victoria were already in the dough stage of maturity and the
impending weekend rain was enough to swing their plans over to grain production.
This estimated level of abandonment of oaten hay has changed from 30 to 40 per cent at the
start of November to 50 to 60 per cent this week.
Buyers fear supplies of summer crops will be greatly restricted as well.
The maize area to be ensiled in Victoria and NSW next autumn has been plummeting as paddocks are too wet to be planted.
Lucerne paddocks have been exposed to continual sodden conditions over many weeks,
challenging plant survival.
The normally robust supplies of lucerne hay from the Lachlan River valley between Cowra and Forbes are now also in doubt.
Hay growers have never seen a year like it. As the area sown to hay crops had already fallen two years running, the fall in fodder production this season is unprecedented.
Livestock producers remain confident they can still bale some pasture silage although the
pasture stands are now quite rank and the quality will be poor.
Dairy farmers will be looking for high quality hay to supplement their poor-quality pasture hay and silage.
There has been a small trade of pasture cereal hay under $220 a tonne ex farm but supplies are dwindling.
To capture some high-quality feed, some are resorting to high moisture hay.
After agreement with buyers, growers have baled hay at moistures above 17 per cent and delivered loads to buyers’ farms and feedlots for immediate feed out.
This hay has been selling for $250 a tonne ex northern Victorian farm.
Some parcels of old crop oaten hay which had received one rain event yet tested with WSC
sugar content of over 35 per cent has sold for $350 a tonne ex farm.
At the other end of the quality spectrum, oaten hay cut in September that had received more than 300mm of rain and was very dark in colour sold for $170 a tonne ex farm in the Victorian Mallee.
GRAIN TALK:
With last week’s harvested period measured in hours rather than days, and more rain expected this week, the market remains fixed on how rain will impact the harvest.
The rainfall that fell over the weekend was generally 20mm in the grain growing regions of South Australia, Victoria and the Riverina but most areas of the Wimmera and some of northern Victoria recorded more than 30mm.
These continual weekly rain events have delayed harvest and the supply of grain to buyers who were expecting to have filled much of the nearby demand already from freshly harvested grain.
The brief harvest of last week was sufficient to take the sting out of a market starved from grain. In Melbourne’s delivered markets, milling wheat prices from Hard 2 to ASW grade wheat opened this week down $30 a tonne. Stockfeed wheat is trading $10 a tonne lower than last week.
Wheat prices in the significant port-based markets are also $20 a tonne lower this week and $40 a tonne down from the start of the month.
Global factors are also contributing to these sizeable falls on the eve of harvest.
Last Friday a fresh UN-brokered export grain corridor was negotiated for a further 120 days. This allows for the free passage of grain from three ports in Ukraine and the export of Russian grain and fertiliser. Although the UN and Ukraine wanted a 12-month deal, negotiations will need to commence again next March.
This ensures that grain from the Black Sea will continue to be the lowest cost source for many markets at a time when analysts are increasing their estimates for the Russian grain crop.
Accordingly, Chicago and Paris wheat futures eased $5.80 and $2.30 a tonne respectively last week.
Wheat prices in southeastern Australia have taken a hit in the past month, but they remain relatively high compared to other competing origins. The wheat futures price for the January 2023 contract have been trading at a premium to the Chicago wheat futures for the past five weeks.
This is the first time this has occurred since October 2020.
Despite the fall in wheat prices, barley prices are unchanged to a little higher. BAR1 grade barley is already $70 a tonne cheaper than the stockfeed wheat prices and there are few growers selling barley.
Like wheat, canola prices are 3 per cent lower this week. The port-based prices in Victoria and Port Kembla are bid by exporters around $790 a tonne, $26 a tonne lower than last week.
Winnipeg canola futures traded $20 a tonne lower last week on the news that the Ukraine corridor is to be extended and rainfall in China will improve the production outlook for their canola crop, potentially lowering Chinese canola imports.
‘Demand is weak and prices have softened’: Lentil values fall $100 a tonne
Lentil prices in Victoria have dropped by up to $100 a tonne compared to last year due to global market volatility and tariffs.
‘Not many will be confident to forward sell’
Australian wheat prices have dropped nearly 50 per cent from 2022 highs, pressured by a global supply rebound, and high carryover stocks in Australia. See what it means for growers.