Australia: Barley crop forecast remains at 13 mln tonnes but with major uncertainty about quality

This month’s forecast of Australia’s barley crop remains at 13 mln tonnes but with some major uncertainty surrounding the quality related, especially on the east coast, RMI Analytics said in their December report.

Export grain capacity is expected to remain very tight in the first half of the shipping season.

Rain continues to disrupt harvest in the east and quality degradations are most certain. Western Australia harvest continues to perform very well, under ideal harvest conditions, and putting good barley into storage.

ABARES has set production at 13.3 mln tonnes, validating a crop output in the 13-13.5 mln tonnes range and as a proportion of the world crop Australia rises to 9% this year, the second highest in ten years.

With the harvest quality remaining a big unknown, the Australian barley prices nevertheless remain the most competitive in the world, but are still slow in closing the gap to global values (mainly due to weather concerns on the east coast). The RMI Analytics expectations are Australia values have room to move higher in time and close the gap to other origins (similar to Argentina price movements).