Price guide for hay and grain: High yield potential

Need to know the latest prices for the hay and grain markets? Our experts have crunched the numbers you need to know.

Reports of potential lodging and need for fungicides are telling the story of healthy crop

Reports of potential lodging and need for fungicides are telling the story of healthy crop

growth and the potential for high yields, but the price outlook for grains and oilseeds

continues to favour consumers.

Satellite imagery is increasingly being used to model growth of crops and pastures and current projections support this optimism.

The US Government’s National Oceanic and Atmospheric Administration models crop health through a vegetable health index which measures the light absorbed by crops.

In the most recent weekly update, the VHI of crops in Western Australia, South Australia

and NSW shows the current season index is the second highest of the last 10 years, exceeded only by the index of 2016.

The Victorian VHI sits at 79 per cent, higher than the 76 per cent recorded during the record year of 2016.

Picture: Zoe Phillips

Buoyed by their yield prospects and concerned with the falling grain markets, Western Australian grain growers have been active sellers in the forward markets.

Early rains provided WA growers with ideal timing for weed control and planting into soils with high levels of stored moisture.

According to the Grain Industry Association of WA, the total WA crop production estimate of 19.6 million tonnes is still 10 per cent lower than last year’s record of 24m tonnes but if realised will be the second highest on record.

Last week the ASX January 2022 wheat futures on the east coast fell $27 a tonne to settle at $383 a tonne.

This price is still $17 a tonne higher than immediately prior to the Russian invasion of Ukraine.

Cash prices bid by exporters have eased as well sliding $23 a tonne to $388 a tonne on a Geelong basis.

Wheat markets in Europe and the US have been impacted by the concerning low economic growth projections for China, the improving trend in grain shipments from Ukraine, poor US wheat sales and the falling levels of buying interest from major importers such as Iran.

Arguably more concerning for grain growers has been the plummeting prices for canola.

New crop values opened this week at $727 a tonne delivered to Victorian ports less freight to local delivery points.

This is a 12 per cent fall in a week and a $373 a tonne fall from the seasonal high of $1100 a tonne set in early May.

These falls coincided with Winnipeg canola futures falling $34 a tonne and Paris rapeseed futures sliding $71 a tonne.

Falls in oilseed prices have been attributed to the favourable growing conditions for soyabean crops in the US Midwest.

HAY MARKET:

Reports of a favourable winter and plenty of optimism for a promising spring are coming from many regions and some are questioning the outcomes for hay and silage this spring.

The official forecast from the Bureau of Meteorology is that there is greater than 80 per cent chance of above average rainfall for the September to November period for much of the eastern half of mainland Australia, with the chances of rainfall falling in western states such as South Australia and Western Australia.

This is classified as a La Nina alert and is shaping up as the third wet season in a row.

With this rainfall forecast, the generous levels of soil moisture and the ample supplies of low -cost irrigation water, it appears that moisture is not likely to be a limiting factor for hay and silage production.

In fact, in some districts, water availability has hampered biomass production during winter.

Only in the last two weeks have dairy and beef producers in the Nowra region been able to open their autumn renovated ryegrass paddocks to stock. The east coast lows have ensured that their paddocks have spent most of the winter in a sodden state, unable to support the traffic of grazing cattle.

The ideal timing for urea applications have also been restrained by excessive moisture limiting tractor access.

Picture: Zoe Phillips

Despite some setbacks, most fodder producers are confident in their ability to produce above average yield but remain unsure about their quality.

Due to persistent rain, the quality of hay north of the Great Divide has been below average in the last two years and rain this spring has a high chance of either delaying cutting or spoiling windrows through leaching or prolonged curing.

The high yielding oaten hay crops of the North Central and Mallee of Victoria could offset some of the reduced area sown to export oaten hay this year, but hay exporters are eager to see high testing hay to compete against the North American and Spanish exporters.

Irrigated producers of the Riverina and northern Victoria are considering early cutting of crops as silage to achieve timely establishment of summer crops such as maize. With irrigation water in the NSW Murray system trading as low as $50 a megalitre, it’s a popular option for some growers requiring them to cut their vetch or cereal crops as silage in the next six weeks.

On the demand front, some hay growers are speculating there may be an increase in buying activity from cattle producers due to the presence of Foot and Mouth Disease on the island of Bali.

While it’s a highly cautious approach, some cattle producers in South Australia have already begun accumulating increased hay stocks. This hay is intended for any future FMD-induced quarantine lock down of properties and associated halt to transport of stock and feed between farms.