USA: Malting barley market locked in place at least for present time - expert

With the 2013 malting barley contracts filled and maltsters concentrating on bringing in the 2012 contracted bushels, the malting barley market is pretty well locked in place at least for present time. The contracts were grabbed up in a hurry by producers, which is a good indication the growers were satisfied with the contracts, Steve Edwardson, executive director of the North Dakota Barley Council, was quoted as saying by The Prairie Star on March, 22.

He said he expected to see relatively stable prices for both feed and malting barley, at least until the planting intentions report comes out on March, 28.

"That will signal the market whether we will be needing more or if our current forecasts are sufficient," he said.

Edwardson expects to see a slight decline in North Dakota's barley acres this year, with planted acreage likely falling in the range of 750,000 to 900,000 acres compared to the one million acres seeded last year.

"I'm giving a pretty wide range, with the worst case scenario on the bottom end and the most likely on the top end," he said. "We think the amount of production for the maltsters to contract in 2013 was down slightly due to good crop conditions in 2012. And that also translates into the amount of carrying time the malting industry wishes to carry an inventory, or in other words, how substantial do they want to have their cushion?"

Looking further in the future, Edwardson noted we are starting to see a little interest from Japan in procuring some feed barley.

"It's not much at this time, but they are asking questions," he said. "There have also been some inquiries from Mexico and Central America, and the U.S. even sold some feed barley to Saudi Arabia late last year and that hasn't occurred in quite some time.

"So there are a few external factors that are giving us, as an organization, some optimism for what the future could hold."

The current export picture, however, isn't quite so encouraging. For the second consecutive month, the March Feed Outlook Report issued by USDA's Economic Research Service, said U.S. Census Trade Bureau data provide support for a one million bushel downward revision for the U.S. barley export projection. At eight million bushels, the updated 2012/13 export forecast is approximately 9 percent lower than the 2011/12 estimate. The report also noted this decrease in expected feed barley exports reflects the strong competition the U.S. faces from Australia and Ukraine.

As a result of the anticipated lower export figure, the ending stocks for barley was increased by one million bushels and the barley price range was increased by a dime to $6.25 per bushel on the low end and reduced by 10 cents to $6.55 on the high end. The average barley prices were set at $6.40 per bushel.

Actual elevator cash prices in the region showed malting barley had slipped back around 20 cents during the last two weeks to $5.80 a bushel, while feed barley prices remained steady in the $4.80 range.