The winter rains came at last for those who have been long waiting, with falls of 10 to 30 mm across the Flow Family earlier this week. Cattle, wool and dairy were the big improvers across the commodities this week, but there is an emerging picture that hay shortages could loom mid-term as farmers move to other commodities.
The Eastern Young Cattle Indicator streaked ahead to a new record high to put a spring in the step of graziers.
On the latest available data, one Australian dollar buys:
77.31 US cents, down 77.42 cents
84.68 Japanese yen, down from 84.81 yen
63.57 Euro cents, down from 63.64 cents
54.90 British pence, up from 54.67 pence
107.80 NZ cents, up from 107.55 cents.
Water - Rainfall
The next week's rainfall projection to Friday 18 June is positive reading for those in the Mount Lofty Ranges of South Australia and west coast of Eyre Peninsula, but otherwise in the 10-15mm range for most of the Flow Family in regional SA, Victoria and NSW.
As for the week just passed, a happier picture than next week with higher falls across the Flow Family area:
Water - Irrigation
On the latest available prices published via the Bureau of Meteorology, SA Murray prices climbed 10 per cent this week to $100 per megalitre, with low volumes traded. Steady trade in the NSW Murray sees prices climb back up $2 to $92, whereas Victorian Murray prices remain constant at $95 with low trade volume. Murrumbidgee prices picked up slightly by $3 to $83, with low trade.
Livestock
The suspected Russian-sourced hacking attack on global processor JBS had an impact on processing in Australia, but little apparent impact on livestock prices. The hack has led at least one analyst to worry about the future stability of the US' domestic meat supply.
Cattle
For those that wondered if the 900c mark was a ceiling for the Eastern Young Cattle Indicator, wonder no more - the strong rainfall perhaps drove excitement of more feed in the pasture, as the price soared on Monday and kept going, now standing at 913.22c per kg cwt. That's a 19.8c increase on the week and a clear recovery with the 4-week price increase only 10.49c by comparison. Prices now stand at 156.16 higher than the same time last year.
Vealer steers continued their price improvement, rising 25.9c as the biggest upward movers to 537.2c. Processor yearling steers fought back after recent falls, up 16.6c to 474.4c. Restocker yearling steers improved 7.2c to 549.3c, while both heavy steers (398.6c) and medium cows (283.7c) fell 4.4c, cancelling out last week's increases.
Cattle - New South Wales
After a poor week last week in the national comparisons, New South Wales was back up in the upper ranges of pricing compared with the other states, with the top restocker yearling steer price (569.4c, up 47.9c, after falling 9.9c the week before) and top of the eastern states for vealer steers (540.4c, up 16c) and feeder steers (462.8c, up 1.4c). Medium steers were the only NSW category to fall, down 11.9c to 411.5c.
Wagga Wagga prices continue to perform strongly, the average price per kg of cwt at 950.66c taking fourth ranking nationwide, and yarding 1,181 this week the second-largest contribution after Roma towards a nationwide near-10,000 yarding.
Monday's yarding report from Wagga however reported 2,250 head, down 205 with quality 'mostly secondary, with trade cattle limited'. However, prices continued to gain momentum thanks to winter rainfall and tightening supplies. Those categories where prices were sluggish were attributed to the plainer quality of the offering.
Southern NSW prices remain stronger than all other districts of the state other than heavy steers (392c), with northern NSW just one cent stronger at 393c. The contrast is starkest on restocker yearling steers, at 599.8c, northern NSW the next best at 486.2c.
Cattle - South Australia
South Australian processor yearling steers recovered so strongly from last week's price fall (-31.6c) that they went well out in front (up 76.4c) as the nations' best price, at 515.7c.
In other available categories, medium steers were hammered 61.1c to 344.7, now the only category in SA to be in worse shape - on this week's price - than the same time last year. Feeder steers fell 28.1c to 419.7c.
On Wednesday Mount Gambier yarded 100 fewer head to 297, continuing the downward slide in numbers. Quality was reported to be 'very mixed with a wintry feel over the pens', resulting in a 'mixed price market'.
At Dublin's Livestock Exchange on Tuesday, yardings fell 145 head, dropping the previous week's gains from the north. MLA Market reporter John Traeger attributed the fall in volume to 'extreme weather and some welcome rainfall' - but quality was 'again, extremely mixed'.
Further south at Naracoorte, yardings picked up 183 head to 635 on Tuesday. Quality was 'boosted' with more cattle off feed coming forward and some better grass-fed pens, seeing the market sell to mainly dearer rates. Heavy cows were also reportedly in demand.
Cattle - Victoria
In most categories, Victoria occupies the second or third best prices compared with other states, but with the top medium cow prices at 315.7c (+5.9c) and best recorded heavy steer price at 422.5c (+9.1c).
It's a resilient performance considering prices fell across most categories by 5-25c, vealer steers the hardest hit, down 25.9c to 466.6c.
Western Victorian prices now lag the central west and/or Gippsland in most categories, most pronounced in processor yearling steers now at 426.7c compared with Gippsland (440c) and central west (469c).
Warrnambool's yardings on Wednesday fell harder than the previous week, down to 487 head (-314), which agent Erich Gstrein attributed to 'possibly due to the wild weather'.
Dairy
There was positive news on the pricing front for Victorian and New South Wales dairy farmers, as reported on FlowFM earlier this week, with prices on track to record levels and transparency reforms having an unexpected effect.
This is confirmed by the Australian Dairy Products Federatoin showing that for the March to June quarter, full season and quarterly weighted average Central SA prices stand at $60.87 cents per litre (+8.61 on the last quarter), the highest they have been across the year. Similar highs for the year are now reported for NSW prices at $63.73 (+5.55), and south-east SA & western Victorian prices at $53.09 (+3.55).
Global prices for mild solids fell 1 per cent in milk powders and anhydrous milk fat according to the federal agriculture department, with cheddar cheese prices holding unchanged.
Sheep
Meat and Livestock Australia confirmed this week that the national sheep herd rebuild is now in full swing. They project that the national sheep flock will grow by 6.3 per cent to 68.1 million head, back above 2019 levels. The flock had fallen to 64 million head last year, the lowest on record, but by 2023 could reach 75.4 million head.
MLA also project that the longer-term trend of 4 per cent growth in lamb slaughter is not likely to be reached this year.
A national herd rebuild may explain in part why price activity is relatively constant in the sheep yards with little fluctuation, as farmers hold on to stock, perhaps emboldened by recent rains.
The Eastern States Trade Lamb Inidicator was down 3 per cent on Wednesady to 812c, sitting 14 per cent lower than the same time last year.
Merino lambs rose the highest this week, up 14c nationwide to 733c, while heavy lambs climbed 13c to 799c.
Last week's slump in restocker lamb prices has been traced back to a data anomaly in western Victoria, mentioned further below. On the corrected figures, restocker lambs are still down 19c based on the accurate prices for last week, sitting at 799c. Mutton was hardest hit, down 22c to 640c.
Sheep - New South Wales
NSW held on to top billing in heavy lamb prices, at 804c but surrendered ground in other categories. Their Merino lamb prices climbed most out of any category are now, by a cent, the eastern states' best at 733c (+28c), pipping SA on 732c.
Heavy lambs were the other rising category, up 17c to 804c, while restocker lamb prices plummeted 67c to 844c, drawing level with South Australia's price.
Wagga sales on Thursday halved by a big 24,100 head to 25,900 which MLA attributed to the prediction of rain. Quality dropped away under 22kg with many longer wool lambs requiring more finish.
Corowa yards were back in action on Monday, shedding 3,350 head on the fortnight earlier to 14,800 head. Quality was reportedly plainer overall in a 'firm to slightly softer market'.
Sheep - South Australia
South Australian lamb prices remain strong in restocker lambs, at 844c (picking up 33c this week to draw level with NSW) and trailing only Queensland at 906c.
Otherwise, prices are generally poorer compared with other states, heavy lambs however at 741c (despite rising 10c) third-best behind Victoria (798c) and WA (784c).
Light lambs fell hardest in South Australia, dropping all of last week's gains to drop 39c to 754c.
Tuesday's Naracoorte yardings fell 1,288 head to 3,711, where 'quality continues to be very mixed'. However, pricing reportedly reversed trends of the previous week with lamb prices lifting slightly but sheep prices falling.
Further north on Tuesday at Dublin's Livestock Exchange, volume rose 1,000 head to 7,000 with quality again extremely mixed with more heavy trad and export lambs through the offering. Competition was reportedly good with restockers more active this week on a poorer selection.
Sheep - Victoria
FlowNews24 followed through on last week's bizarre two-thirds fall in the restocker lamb price in Western Victoria, with MLA reporting an error in the data that was fed to them. Nobody was willing to take responsibility for the error but bad data was the cause, not - as initially suspected - the snap closure of the JBS processor at Bordertown across the border in SA.
Victorian prices are generally in the top three in the nation on most fronts, however are the worst in Merino lambs (730c, falling 21c this week). Mutton prices are strong in Victoria at 656c (down 23c), just a cent shy of Tasmania's best national price at 657c.
Trade lambs fell 26c to 791c while heavy lambs were the only category to improve, up 4c to 798c.
At Swan Hill on Thursday, yardings fell 1,820 head to 3,960, with MLA reporting that whilst one agency had a good run of heavy lambs off grain, otherwise the offering tended to be 'smaller clean-up lots of mixed quality'.
Horsham's yardings on Wednesday dropped 1,124 head to 3,672, with lambs off supplementary feed, cropping nearing completion and 'useful rain falling' according to MLA.
Wool
The NSW department of primary industries observed last Friday that wool was up 1.6 per cent to 1,254c/kg (Melbourne 21 micron) with broad gains in Sydney in Melbourne, and a relatively low 7.4 per cent pass-in rate.
The good news continued through this week according to Australian Wool Innovation, with prices hiking higher by between 3.65 to 4 per cent across the currencies, the Eastern Market Indicator standing at a handsome 1,393 c/kg, up 50c.
AWI reports:
"The Fremantle selling centre was in recess for the week so it was left to just Melbourne and Sydney to provide the action.
"The competition was intense from the outset amidst an atmosphere that was buoyant to say the least."
Grains and Oilseeds
As reported on FlowFM early this week, ABARES released their winter crop outlook which indicated record plantings but not a record harvest due to concerns over the late start to the Victorian and South Australian seasons. Those comments came before this week's rains and in an interview available on the FlowNews24 podcast channel (playing at the end of this article), ABARES senior economist Peter Collins would not be drawn yet on what those rains might mean for the national crop forecasts.
Wheat
NSW Department of Primary Industries (DPI) reported in their most recent report published late Friday that wheat prices were up 1 per cent at that time to $314 per tonne (H2). They observed that showers across the Riverina were good news for their winter crop, providing top-up moisture after a dry April and May.
On the latest available prices from Wednesday via the Department of Agriculture, Water and the Environment (DAWE), wheat international prices rose a further 2 per cent to $290 on the US No. 2 hard red winter wheat indicator fob Gulf, but feed wheat at Port Adelaide was steady at $371 per tonne and milling wheat down 1 per cent to $4375 per tonne.
2021/22 prices on offer according to AWB on multigrade APW1 range from:
NSW: $264 at Narrandera to $271.50 at Brocklesby and $279.50 at Henty West. (compared with $262.25 on offer at Grong Grong via Cargill)
Vic: $286 at Charlton, $283 at Donald, $278.75 at Murrayville, $278.25 at Rainbow and $275.25 at Ouyen (as opposed to $279.25 at Birchip and $311 at Geelong terminal according to Cargill)
SA: $300 at Port Lincoln and Adelaide, $297 at Giles, $293 at Wallaroo and $275 at Thevenard. (and according to Cargill, $302.30 at Mallala and $2823 at Pinnaroo)
Barley
Wednesday's prices via DAWE indicated feed barley at Port Adelaide was up 2 per cent to $323 per tonne.
DPI observed last Friday that Barley prices were up 3.3 per cent to $250 per tonne on their metric, with volumes at 689,272 tonnes in April, easing off prior volumes. Major destinations were Thailand, Saudi Arabia and Japan.
Barley price projections for 2021/22 BAR1 range from:
NSW - $220.50 at Temora, $214.50 at Lockhart and $212 at Grong Grong
Vic - $232 at Donald, $230.50 at Charlton, $226.50 at Murrayville and $219.50 at Ouyen
SA - $250 at Adelaide and Port Lincoln, $247 at Giles and $242 at Wallaroo
Canola
ABARES senior economist Peter Collins told FlowNews24 this week that the 25 per cent higher additional national planting of canola this year was correct, with Western Australia planting a record 35 per cent more. NSW is estimated to have planted 27 per cent more, which he attributes to the positive opening to the season in those states.
DAWE prices reported on Wednesday showed that after a one-week correction of the upward roller coaster, the ride was back in action again this week. Canola's Canada rapeseed prices fob Vancouver rose 3 per cent to US$718 per tonne, and at Kwinana, WA were up 5 per cent to A$776 per tonne.
DPI noted that canola was up 5.9 per cent to $740 per tonne with a price recovery due to Northern American weather concerns. They projected that prices would fall as the northern hemisphere harvest begins.
According to AWB, prices for 2021/22 Canola on offer range from $701.75 at Temora to $720.60 at Naracoorte to $733 at Rainbow, $736.75 at Wycheproof and $739 at Charlton.
Cargill indicates the latest SA prices on offer for 2021/22 certified range from $764 (down $2) at Port Adelaide through to $735 (down $2.50) at Keith. In Victoria, prices were up slightly and stand at $735.25 at Birchip, $739.50 at Dimboola and $761 at Geelong terminal. NSW prices range from $722.25 at Grong Grong to $736.75 at Cunningar.
Pulses
DPI claim that lentil prices climbed to $900 per tonne on the back of speculation India would reduce tariffs on imported pulses and the tight Australian and Canadian supplies.
Hay
Hay prices remain well below 5-year lows across the Flow Family, falling slightly in early May and remaining at those levels according to Dairy Australia. South Western Victorian prices are at $190 per tonne and both central and south east SA $205. Central SA's prices are far closer to longer-term averages.
Prices steadily falling and now at $195 in central west NSW despite reports that:
"Significant mice numbers continue to damage fodder stores, as they eat through weather damaged hay from last season. There are reports that numbers could be slowing down due to the work of farmers baiting and reducing food sources."
Feed Central say their purchasers have been knocking back a large portion of product from mice-affected areas:
The mice have gotten to a point where Feed Central has had to reject a large portion of product that growers are wishing to sell due to the severity of damage that has been caused to the hay.
The persistence of the mice plague will have long term and short-term effects of the supply of quality hay.
Currently, thousands of tonnes of cereal hay and straw are being destroyed by mice who continue to burrow into bales look for food, shelter and warmth on these chilly nights!
The shift away from hay plantings due to attraction in other commodities was also noted by ABARES senior economist Peter Collins in his conversation with FlowNews24 (in the podcast player below), with Feed Central expressing concern about the reduced amount of land nominated for hay production:
If mice continue to run rampant growers will be seriously considering their production choices for new season (for example hay vs grain).
Many discussions have already been had with growers who are reducing the amount of land nominated for hay production.
In the long-term, this could be detrimental to quality hay supply moving forward.
Dairy Australia reports that nationwide:
There were reports of widespread rainfall through Western Australia, New South Wales, and Victoria, with some lighter rain through the Mallee in Victoria, and across Central South Australia. Weather forecasts suggest more rain again next week for the southern states which is hoped to boost winter crop growth.
Cooler conditions through much of the southern parts have been causing pasture growth to slow, with more farmers starting to feed out. South Australia farmers continue to be one of the bigger consumers of fodder at present due recent dry conditions. Many parts of Queensland are reportedly still drought declared but with limited stock numbers demand is still minimal.
Lucerne continues to be purchased by many farmers in New South Wales and Queensland as they work to keep valuable stock in peak condition with good quality high protein fodder.
Trade continues to be limited as growers focus on completing winter crop plantings and mice control in the eastern states. Despite a trickle of movement of pre-committed hay, there is yet to be a dramatic lift.
Below: the FlowNews24 podcast player with Rikki Lambert's interview with ABARES senior economist Peter Collins: