The latest Arable Industry Marketing Initiative (AIMI) report also revealed total plantings of cereal crops, particularly feed barley, were down on last year.
“The amount of grain in hand is a concern coming into this harvest. Barley is the standout,” Leadley said.
“We would love to see sold grain moved off farm to an end user so farmers can get a handle on what needs to be moved to market and to give farmers some cashflow as they prepare for the new season,” Leadley said.
As a reflection of the feed barley in hand, plantings were down this season, he said.
With less barley, more milling wheat had been sown with the planted area up 26% on last year.
While there was surplus grain in hand Leadley was confident, given the new Fonterra guidelines on palm kernel feeding and the predicted El Nino weather pattern, grain would move in the coming months.
Irrigated areas were expected to come into the fray this season as the dry started to bite, wells were drying up and there was limited water in many surface streams, Leadley said.
“This will impact pasture production in irrigated areas so potentially grain could start to move quite quickly if this drought creeps in.”
Bit prices were likely to be well back on last year.
“It’s all a reflection of the market. As growers we want to see prices move up but we understand the difficult case for the dairy industry.
“Grain is a sound food option and arable is well placed to supply,” Leadley said.
But growers were wary about over-committing to contract sales with an El Nino summer looming and limited rainfall already occurring across eastern areas.
While El Nino could boost demand, overall it would not be an ideal situation.
What the grain market really needed was more optimism in the dairy sector to give farmers more confidence.
This was typically peak trading season for grain but the market remained quiet, even at significantly reduced costs, Leadley said.
Feed barley had been selling as low as $270/t in Canterbury compared to this time last year at $414/t.
Southland and Manawatu were faring better selling from $300-$380/t compared to $455/t last year.
"As growers we want to see prices move up but we understand the difficult case for the dairy industry."
Brian Leadley
Federated Farmers
Feed wheat was a similar story selling in Canterbury from $290-$320, down from $419 this time last year while Southland and Manawatu were tracking up to $380 and $390/t, compared to last year at $433 and $473 respectively.
There continued to be a little bit of interest out of larger poultry companies for domestic grain but it was opportunistic buying in between vessels of imported grain and was unlikely to change the domestic market.
From the AIMI report the estimated unsold milling wheat was 10,500 tonnes, which was similar to the same time last year.
Sold grain still stored onfarm was 40,000t, slightly up on last year with overall onfarm storage up 11%.
All milling wheat crops were in the ground by mid-October with the planted area estimated to be up 26% on last season.
The estimated tonnage of unsold feed wheat at 34,000t was up on the same time last year but lower than the two preceding years and the tonnage of sold grain still stored onfarm at 101,900t was also up, resulting in overall onfarm storage being up 37% on the same time last year.
Feed wheat crops in the ground equal the same as last season.
Unsold feed barley at 59,000t was double that of last year and the preceding year and sold grain still stored onfarm at 121,600t was more than double the volume of the same time last year and about 40% up on the two preceding years.
Onfarm storage of feed barley was up 116% on the same time last year with feed barley crops sown this season estimated to be16% down on last season.
Malting barley planted was down 4% on last year while milling oats were up 13% and feed oats up 18%.
Overall area sown, plus intended to be sown in wheat, barley or oats was predicted to be down 5200ha or 4%, on the area harvested in 2015.
The objective of the AIMI survey of cereal growers was to determine sales, storage and plantings at October 10.
The maize survey was due out later this month.
