THE hunt for high-quality oats continues.
Prices for milling-grade oats are up $10 a tonne this week.
Although we have seen some general rain across many areas of southeast Australia, there has not been a surge of selling interest from oat producers.
Only a very small portion of last year's oat crop achieved the milling oats grade of a minimum test weight of 52kg per hectolitre.
Most oats that have been offered for sale typically are testing around 45-47kg per hl.
Traders are sceptical that further general rain next month will bring more milling oats onto the market. The conventional wisdom is that those oat growers who achieved milling grade this season have already sold their stocks.
Like the oats, triticale growers are also struggling to meet the test-weight requirements of the market this year. Although the triticale grade calls for a minimum of 65kg per hl, many samples are falling short of the mark.
The major stock feed compounders are generally quiet.
Many mills have pre-purchased grain for their stockfeed needs and are not active buyers. This lack of buying interest coincides with the grain growers' general lack of selling interest of cereal grains at the current low prices.
Domestic cereal-grain prices continue their softer trend.
The price of F1 feed barley is down $2 a tonne this week, to $160 a tonne delivered to Melbourne.
Wheat for stockfeed is $1 a tonne easier at $202 a tonne delivered to Melbourne end users.
There is also very little joy for grain growers in the export markets.
With the Australian dollar trading at more than US$91c, most port-based wheat and barley prices were lower last week.
Early this week H2-quality hard wheat for delivery into Victorian ports was $3 a tonne lower at $205 a tonne, while APW wheat was unchanged at $197 a tonne delivered to Portland, Geelong or Melbourne.
Grain analysts are now speculating on the size of the new-season grain plantings.
Low wheat prices, and the need for break crops, has some analysts scaling back the area sown to wheat in Australia by 6 per cent from last year's high figure.
Consideration of other major wheat producers shows a similar trend. Canadian producers are showing a preference to plant oilseeds and pulses, while US grain growers are showing increasing interest in the row crops of soybean and corn.
The market appears to be working.
Low prices for wheat and barley are dampening production, which should lead to higher prices in the longer term.
However it seems unlikely that any longer-term lift in grain prices will assist the market for grain from the current 2009-10 crop.
