Global pressures are changing the pricing of domestic grains and will lead to a shift in the use of feedgrains this coming season.

Domestic prices for feed barley are now rising at a greater rate than wheat prices, which is causing stockfeed users to reassess their buying preferences for energy grains.

Although the world grain trade has been focused on the reduction of milling wheat supplies in Russia, Ukraine and Kazakhstan, these countries were large suppliers of feed wheat.

World demand for feed wheat has shifted to sources such as corn and barley.

Continued demand for feed grain in China has added great pressure to the largest corn supplier, the US. A measure of this demand pressure is the stocks-to-use ratio.

In the US stocks-to-use ratio for 2010-11, corn stands at 8.3 per cent.

Despite the fact that the US is expecting a record corn crop this year, this is the lowest ratio for corn in 15 years. Traders are banking on a strong market for corn.

US futures markets are showing the largest long positions in four years.

Feed barley prices were trading at a $50 to $60 a tonne discount to the prevailing Melbourne stockfeed wheat price during last harvest.

Feed barley prices have escalated relative to wheat and were trading at a $10 a tonne discount mid last month.

The shortages of old-crop wheat have since pushed wheat higher.

Domestic pressures have pushed stockfeed wheat to a new high of $300 a tonne delivered Melbourne mill this week, a rise of $9 a tonne from last week.

F1 feed barley is $2 a tonne higher this week to $257 a tonne.

New-season prices for cereal grains are generally $3 to $5 a tonne easier this week, mainly on the back of a higher value for the Aussie dollar.

Multigrade contracts for APW wheat and malting barley delivered to Victorian ports were available last week at $287 a tonne and $310 a tonne respectively.

Prospects for a huge harvest in eastern Australia are showing in grain forecasts.

Wheat exports are expected to be more than 18 million tonnes, a rise of 20 per cent on last year.

Continuing cool weather has some anxious about frosts during flowering of cereals and canola.

The favourable season throughout eastern Australia is also expected to change the supply of protein sources for stockfeed markets in 2011.
 

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