World: Barley markets continue to show strength
Barley markets continue to hold on to their high levels despite the latest USDA Economic Research Service (ERS) report which estimates barley production in the U.S. will increase by 30 million bushels in the 2007/08 marketing year and a five million bushel boost in ending stocks, Farm & Ranch Guide published May 25.
The latest report was based on a 250,000 acre increase in planting coupled with a 4.4 bushel per acre yield increase. The ERS predicts U.S. growers will harvest 3.2 million acres this year with a projected yield of 65.4 bushels per acre, resulting in a total crop of 210 million bushels.
The barley crop is off to a good start in most areas of the region, according to Larry Raap, grain merchandiser for Sun Prairie Grain in Minot. The acreage figures came in pretty close to what the industry was expecting.
“There is probably just a few more acres planted to barley around here than there was last year,” Raap said, “but any increase is only minimal.”
As far as barley prices, Raap gives the corn prices much of the credit for the strong feed barley prices, and malting prices need to keep pace with the feed prices, but potential supply concerns are also a contributing factor.
“I think they don't have as much of a carryover as they would like to have,” he said. “The maltsters are probably a little short on acres they would like to have seen committed, and I think part of that is due to the fact that some farmers wanted to take a chance on selling on the open market this year, thinking they could do a little better than the contract prices being offered. They are anticipating that the open market prices are going to be better than the contract prices.
“The wisdom of that decision depends upon the weather between now and then,” he added. “If we continue to get adequate moisture and the crop looks fine, I could see the barley market tapering off if we get into mid-June or July and the crop looks good.”
This price drawback could impact both feed and malting prices, according to Raap, since the two are coupled together somewhat.
The ERS estimates call for barley beginning stocks to total 63 million bushels at the start of the 2007/08 marketing year, down from 108 million bushels at the beginning of the 2006/07 marketing year. Imports are expected to total 20 million bushels, up 10 million from a year earlier, resulting in a total barley supply of 293 million bushels.
On the usage side, feed and residual use is expected to decline by five million bushels to 50 million and exports are also expected to shrink by five million bushels to 20 million. The industrial use of barley is expected to remain the same at 155 million bushels, as domestic beer demand remains steady. Total barley usage is pegged at 225 million bushels, down from 235 million a year ago.
Because of the estimated increase in ending year stocks, barley prices are projected to fall in a range of $2.85 to $3.45 per bushel, compared with $2.88 per bushel in the 2006/07 marketing year.
Checking local elevator prices on the website smallgrains.org showed feed barley prices for the most part remained steady although there were a few elevators that had either price increases or decreases, while malting barley prices advanced slightly.
A couple locations listed feed barley prices that were 20 cents lower from two weeks ago, while a few others had price jumps of a dime. The range for feed barley was $2.90 to $3.35 a bushel. Malting barley prices were either steady or higher, with some price increases amounting to a dime to a quarter a bushel. Malting prices at the low end of the scale was $3.45 and the high side was $3.83.
In summary, Raap said the markets could be crazy this summer, depending on what the reports, like the crop conditions and usage figures tell us. “It could be a very jittery market, I think,” he said.
Înapoi
(libra 0.7695 sec.)