Harvest is slow in the east, while in the west, headers are going hard, but there is still some way to go. Hay prices seem to have found a level, while wheat is defying harvest pressure in the east.
Moisture is not great for harvest, and intermittent rain continues to slow progress up and down both the east and west coasts. WA had a good run the week before, with CBH receivals streaking ahead of those on the east coast, moving through 6 million tonnes. Last year CBH received 19.5mmt and CBH’s revamped harvest report pegged progress at 24% complete as of the 19th of November.
A week later total east coast receivals sat at 5.8mmt, down 2.6mmt on the same week last year as showers deny harvesters a good run at it. By week 6 last year NSW GrainCorp receivals were at 90.7% of the final figure, while Victoria was at 48%. Things don’t look like improving in the coming week either, with rainfall predicted for all east coast cropping areas over the next 8 days. WA will dry out again and will be looking at a big week.
Harvest progress appears to be reflected in wheat prices. Figure 2 shows the APW price has moved higher in NSW and Victoria, as local demand competes with exporters for the slower supplies. SA is mainly an export market and prices haven’t been as strong, while WA pricing has been flat with strong supplies expected to come in.
The huge volatility in hay prices has abated somewhat, but the last month has seen some sharp moves, especially in WA. At the end of October, Dairy Australia reported pasture hay in South West WA fell $100/t. It looks like local hay supplies have been replenished despite the drain caused by the east coast drought.
On the east coast hay prices have continued to ease as baling continued, but they remain at a premium to this time last year. The drive to refill sheds, along with wet weather delaying baling and impacting quality, has all combined to help limit price declines. Hay prices remain close to grain in Victoria and NSW, which suggests those producers who need the roughage are still concerned about supplies moving through summer and autumn.
What does it mean?
There have been reports of sellers holding tight to grain this year, not happy with current prices. If we are to believe the USDA’s numbers, this might not be a great strategy. We do, however, know that volatility will pick up in the new year, which could create selling opportunities.
Key Points
- The harvest slowdown didn’t result in prices rising, but international values have fallen.
- Barley prices have shown a little upside in the last week.
- Barley is priced very well relative to corn thanks to the reopening of the Chinese market.
Click on figure to expand
Click on figure to expand
Click on figure to expand
Data sources: Graincorp, CME, Viterra, ABS, Bloomberg, Dairy Australia, Mecardo
