World: Malting barley outlook from CWT

Trade sources report that US old crop 6 row vomitoxin free and low vomitoxin malt barley prices are strengthening due to vomitoxin concerns, The South West Terminal Marketing Group has recently published in Its last Outlook.

Trade sources note that the supply of 6 row malt barley meeting malting specifications in both the US and Canada is limited. The malting companies in the USA have been drawing their 6 row malt barley inventories for the past 2 years and they will have to start replenishing them. US 6 row malt barley prices are currently at about the same level as the current CWB PRO backed off to a Canadian delivery point. There are stories circulating that Canadian companies are reluctant to put on any further malt barley sales this crop due to supply concerns.

Trade sources say companies in the States are cutting back on their new crop 2 row malt barley contracting and new crop 2 row prices are down 25 cents US per hundredweight. One trade source is forecasting US 6 row barley acres to be down 7 – 10% next year. The source cites US farm programme favouring soybeans and corn as the reason for the falling acres. The shortfall in production would be imported from Canada.

The US Food and Agriculture Policy Research Institute thinks that the US barley carryover will fall from 128 million bushels last year to 92 million bushels this year. They note that US barley production has fallen 46% since 1996. On a state by state basis North Dakota barley production is down 60%, Idaho 2% and Montana 20% since 1996.

Though it is coming off its’ lows ocean freight has fallen from its’ highs.

Trade sources see the spread between 6-row and 2-row malt barley continuing to shrink especially into new crop.

Bearish Factors

Trade sources are reporting that Chinese 2 row malt barley prices have fallen $10 US per metric tonne since October. Current Chinese prices are about $10 Canadian under the current PRO.

The Australian Barley Board (ABB) closed their barley pools on January 24th citing the appreciating Aussie dollar and need to protect the pool. The ABB said that the large Aussie barley crop will mean that they will be still marketing Aussie barley when the North America crop comes off. Trade sources think that this will mean that the Chinese will not be in the market for as much Canadian malt barley next fall as they traditionally have been since the Aussies will still have malt barley to sell.

Trade sources are predicting that there will be more barley planted in the US next year. One source thinks North Dakota 6 row acres will up 10 – 15%. Kelly Kotowicz of the Alvardo Farmers Elevator in Minnesota sees a 25% increase in barley acres in his area due to the increasing of the protein standard to 13.5% and the vomitoxin discounts being lowered for 1 – 2% vomitoxin from 25 cents US per bushel to 15 cents US per bushel. He also notes that the lowering of the crop insurance base from $2.35 US per bushel to $1.85 US per bushel is also bullish for US barley acres.

Trades sources feel that the US has a sufficient supply of 2 row malt barley for the balance of this crop year.

Trade sources are indicating that Canadian malt company margins are being squeezed.

The Canadian dollar has been getting stronger against the US dollar and this is negatively affecting growers’ returns.

Trade sources feel that Colombia and the other major South American malt barley market requirements have been filled through until June.

Marvin Zutz, Executive Director of the Minnesota Barley Growers Association says that new malting techniques require less barley than in the past.


International feed barley prices are continuing to be firm. If the malt barley prices start to slide then some of the lower quality malt barley will end up in the feed markets.

InBeV is predicting that within 10 years half of the world’s demand for beer will come from China.

The European barley crop was pretty good this year but values have started to erode. Trade sources report that the Europeans have a “significant” unsold surplus but given present values it could start to disappear into the feed market.

Trades sources are watching the European winter barley crops as the cold weather maybe affecting them. If there are problems with the winter barley crop, this could increase the amount of spring barley acres the Europeans plant.

Trade sources are concerned that the poor quality of the Canadian malt barley crop is starting to affect our ability to sell into China.

US barley acres will be influenced by the price of wheat. Trade sources feel that if there is a rally in US spring wheat prices at planting time, American farmers will plant wheat instead of barley. At the present time the trade sources believe that US farmers are favouring barley over wheat due to the lowering of the loan rate on wheat and the higher cost of inputs (especially nitrogen) required to grow wheat over barley.

Agriculture and Agri-Food Canada (AAFC) is predicting that next year’s 6 row malt barley returns will decline relative to next year’s 2 row malt barley returns.

E-malt.com, la fuente de información global para los profesionales de la industria cervecera y de malteado. Los boletines quincenales de E-malt.com incluyen las últimas noticias de la industria, estadísticas en gráficos y tablas, precios mundiales de cebada y malta, y otra información relevante. Haga clic aquí para obtener acceso completo a E-malt.com. Si usted es un cliente de Castle Malting, puede obtener acceso gratuito al sitio web y publicaciones de E-malt.com. Contáctenos para obtener más información en marketing@castlemalting.com.