THE grain markets are softening and growers are struggling to come to terms with lower prices.

Much of this season's wheat and barley harvest is now warehoused in the central handling system.

For growers it is proving a bitter pill to swallow, as prices available in the market are lower than the prices they rejected during harvest in December.

Trader bids are now about $8 a tonne lower than during early December, when prices for F1 barley were quoted at $152 a tonne delivered to Geelong, Victoria.

Traders are concerned at the lack of grain on the market.

If growers choose to hold out for their target price too long they run the risk of competing for export markets when new-crop grain from the northern hemisphere comes on to the market.

Traders are cancelling ships intended to export grain from Victorian ports.

Some are instead now shipping grain from Western Australia.

Most of the two million tonne-plus Victorian barley crop failed to make the malting grade.

There is now a large volume of feed barley available to buyers.

The hot spring weather matured crops faster than ideal, leaving crops with low test weights and high screenings.

While our tables quote prices for feed-one grade barley, there is a growing availability in eastern Victoria of F2 and F3 barley.

The market is yet to fully implement specific price discounts for these lower grades.

Small-grained barley, with low test weights, fails to yield adequate energy as the small grains regularly pass through roller mills and are not digested fully by the animal.

Wheat markets in the US finished last week another 2.3 per cent down.

The message over the past fortnight is there is plenty of wheat in the world and buyers have cheaper options to buy their wheat. International trades last week illustrate a similar story for Australian wheat prices.

Milling wheat traded at levels about $20 a tonne cheaper.

Despite this bearish news wheat prices are higher this week. Prices delivered to the Geelong and Portland for APW and GP wheat are about $4 a tonne higher than last week.

Buyers say there has been a short-term shortage of wheat in the market and buyers have been forced to come to the market.

On the domestic stockfeed market, prices are $3 a tonne cheaper this week.

While there is also a shortage of competitive grain available to buy, the availability of the lower-quality general purpose and feed-wheat grades has improved.