Wheat delivered into northern NSW and southern Queensland has lifted to about $445 a tonne – $130 a tonne above harvest levels – as dry conditions impact supply and force market movement.

The current trend compares to wheat at $370 a tonne in Melbourne and about $302 a tonne at Oaklands in southern NSW, leaving a gap of roughly $70 to $140 a tonne before freight, or about 20 to 45 per cent. The increase in northern wheat equated to a value that was about 40 per cent higher since harvest, while southern markets remained steady.

Barley was stronger again, with supply tight and strong demand from feeders, and while it can push up to wheat or above it, that usually only happens in dry times.

Barley was about $20 a tonne above wheat in southern NSW, with prices sitting around $323 a tonne compared with about $302 a tonne for wheat at Oaklands. Melbourne barley was priced at $355 a tonne and about $323 a tonne at Oaklands, while northern values pushed higher, in some cases trading at a premium to wheat as buyers competed for supply.

Market Check chief executive Nick Crundall said the recent rally had been driven by a tough seasonal start and strong feed demand particularly in the north.

“Prices have exploded. At harvest wheat was about $130 cheaper,” he said. “There is a thirst for anything to feed cattle. Barley is just as high (as wheat), if not higher, in some markets.”

He said feedlots across northern NSW and southern Queensland had been buying hand-to-mouth. For now grain had been sourced out of southern NSW and Victoria to fill the gap, with the spread between regions increasingly shaped by freight. But it was expected to flow into southern markets too.

Mr Crundall said the market had reached a point where grain could be sourced from further afield.

“It is getting closer and closer,” he said. “We might see a vessel out of Portland or Geelong up into Queensland if (seasonal) conditions don’t improve.”

Rupanyup grain grower Andrew Weidemann said barley’s strength reflected both seasonal conditions in the north and the feeding preferences of livestock producers.

“Generally you only see barley higher (than wheat) when there is a dry period,” he said.

“Barley is one of the easier grains to feed and has more energy in it, so people go to it when supply is tight.”

He said demand was not limited to the north, with buyers in western Victoria also active and hay was continuing to move into NSW feedlots too.

Mr Weidemann said the premium could drop back if seasonal conditions improved.