World: Barley prices at unusual premium to feed wheat thanks to strong demand
Barley prices are, unusually, at a premium to feed wheat values in many exporting countries thanks to strong demand for coarse grain, evident in raised prices paid by Saudi Arabia this week for supplies, Agrimoney.com reported on February 21.
While grain prices overall have proved buoyant over the past month, lifted by factors including dryness in Argentine corn producing areas and in some major US winter wheat growing states, barley prices have performed particularly well in many markets.
Russian barley export prices are up $10 a tonne over the past month to $201.50 a tonne, the highest in three years, according to data from analysis group SovEcon.
The rise has gained barley prices a premium even to values of Russian export food wheat of 12.5% protein, which have appreciated by $7 a tonne to $200 a tonne over the same period.
In the French port of Rouen, feed barley was on Monday achieving EUR159.00 a tonne, a premium to feed wheat at E153.00 a tonne, according to Agritel.
A month ago, Rouen feed barley, at E148.00 a tonne, was at a EUR1.00-a-tonne discount.
In Canada, farm ministry AAFC this week reported a very tight price spread between feed barley and wheat.
Barley price as measured in the benchmark Lethbridge market has been hovering around Can$220 a tonne, after starting the crop year below $200 a tonne, AAFC said.
In the UK, barley prices, at £136.00 a tonne in East Anglia, according to the AHDB bureau, have narrowed their discount to feed wheat to £3.50, from £9.50 a tonne a month ago.
According to CRM AgriCommodities, UK barley has actually hit "a premium in the south of England, with the highest feed barley prices for four years".
Feed barley shortages in the west and south west are starting to result in tonnages pricing in from further afield, traders at a major commodities house said.
Surplus tonnage in the east is now being trucked longer distances as a result.
The rise in barley values reflects strong import demand in the face of a series of world production deficits leaving the US Department of Agriculture to forecast world stocks at 17.8 mln tonnes at the close of 2017-18.
That would represent a 20% fall year on year, and the weakest carryout stocks figure in 34 years.
Agritel said that while French wheat prices have resumed their decline mainly due to a lack of dynamism on export markets, feed barley prices are benefitting from a steady demand on the international stage.
In consequence, feed barley prices are now over those of wheat.
Saudi Arabia, where much of the livestock industry has a historical preference for barley, on Monday bought 960,000 tonnes of the grain, taking total purchases for 2017-18 to 6.3 mln tonnes.
The countrys state-owned grain procurement agency, Sago, paid an average price of $243.47 a tonne for the latest order, up 12.3% from the price paid at the previous tender, a month ago.
According to USDA staff, "Saudi Bedouins have preferred barley for animal feed because it is easier to handle and store than processed feed".
Chinese barley purchases have also proved strong, as some livestock feeders seek alternatives to corn, the price of which has been boosted by efforts a drive to erode huge state stockpiles, by curtailing domestic sowings and encouraging demand, including from the likes of ethanol plants.
Chinas imports of barley, over which it operates a favourable import regime, last year soared 77% to 8.87 mln tonnes, in the main from Australia, with Canada and Ukraine other major origins.
However, Australias barley shipments this season look like being constrained by a far lower harvest, and are seen falling by nearly 40%, to a five-year low of 8.0 mln tonnes, according to US Department of Agriculture forecasts.
And AAFC forecasts Canadas barley shipments this season easing by 100,000 tonnes to 2.35 mln tonnes, constrained by a drop in carry-in inventories.
Such declines have helped lift volumes, and prices, of barley from other origins, with Russias shipments of the grain growing even faster than those of wheat so far this season.
SovEcon, quoting customs data, reports Russias barley shipments at 3.9 mln tonnes, a 1.9 times increase year on year, compared with 37% growth to 24.5 mln tonnes in wheat exports.
European Union exports for 2017-18 as of last week stood at 3.47 mln tonnes, a rise of 17% year on year.
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