GRAIN markets are in a holding pattern with demand being met by a small but steady supply of selling from both traders and farmers.
Many Wimmera and Mallee grain growers are also hay producers.
While the low hay prices offer little incentive to sell hay, many farmers are turning to grain sales as a source of revenue.
Domestic prices for feed grains remain unchanged this week with wheat quoted at $208 a tonne delivered to Melbourne and F1 feed barley at $164 a tonne.
Wheat markets have little to celebrate. Wheat destined to export markets eased $3 a tonne last week.
US markets traded more than 3 per cent lower last week following some disappointing sales performances.
Iraq purchased more wheat from Russia and Canada, notably excluding stocks from the US and Australia.
US wheat futures have hovered around US$5/bushel for the past six weeks.
Traders are talking up the possibility of weather problems for the planning of the US spring wheat crop.
If wet and freezing weather hits the grain belt during early spring it will hold up planting.
Most observers take these issues seriously during April and May but they say it's too early to consider weather at the moment.
Despite the bullish trader's expectations, conventional wisdom seems to take the view that the world grain stocks are fundamentally oversupplied.
The summer crops of corn and soybeans in South America continue to grow and large crops are expected to be harvested soon. This corn crop, in particular, adds to an already burdensome supply of feed grains globally.
India, often a large wheat importer, has stated that it is considering exporting both wheat and corn this year.
The Canadian Government is preparing legislation that intends to remove the Canadian Wheat Board monopoly for the export marketing of wheat and malting barley from western Canada.
The CWB claims to be the largest wheat and barley marketer in the world and exported 18.4 million tonnes in 2008-09.
Judging by the slow export program for wheat and barley from eastern Australia, grain prices could be considered high relative to export parity.
Shippers of Australian wheat have commented that they have been able to purchase part shipments of wheat from other traders at prices cheaper than buying wheat directly from growers.
Deregulation seems to have brought competition in the purchasing of wheat. One questions what competition exists on the selling of wheat to export markets and if the full value of Australian wheat is being realised in the price received.
