The Canadian Wheat Board (CWB) announced on July 30, 2004 the market outlook for the 2004–05-crop year. According to CWB, the offshore feed barley market is expected to be very competitive in 2004–05. Global barley production is currently projected at 147 million tonnes, up 7 million tonnes from the previous year, CWB cited USDA. The increase is primarily driven by a production recovery in Europe and the CIS leading to a potentially large export surplus despite tight grain carryover stocks in this region.

An increase in feed wheat supplies available from the Black Sea region combined with prospects for a record U.S. corn crop are also expected to weigh on global feed barley values. Domestically, prospects for a larger barley crop are expected to pressure the domestic feed grain market but prices will also depend on the quality of the wheat harvest and domestic demand. A resumption of live cattle exports to the U.S., blocked since the discovery of one case of BSE in May 2003, would positively impact domestic feed barley prices, although it is unclear at this time when a resolution to this trade issue will be achieved.

Global trade of designated barley is expected to recover in 2004–05 largely driven by a recovery in Chinese malting barley import demand. After a very slow start in 2003–04, China’s import pace returned to more normal levels later in the season. Harvest rains in parts of the CIS may have damaged quality, reducing domestically available supply of malting barley and increasing import demand in spite of larger crops this year. Ample carryover supplies and good crop conditions to date in the U.S. have tempered import demand expectations. On the supply side, in spite of some poorly timed rains in Germany, the EU is expected to have an average malting barley export program this year while Australia’s barley production prospects are fairly good at this time. The global malting barley market should be relatively competitive in 2004–05.

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