North America: Tightness in malting barley supply already proving evident
There is no change to the forecast of North America’s barley crop and the subsoil moisture situation remains dry, RMI Analytics said in their latest report.
Tightness in the malting barley supply is already proving evident and in the analysts’ view is a precursor to the coming months where ensuring sufficient quality barley could be a precarious situation. With harvest 2022 a long way off, summer 2022 could be an extremely dynamic environment.
Reportedly, two barley cargoes from Europe have already arrived in North America, with rumours of further 4-5 cargoes expected. This points to nearly 300 thousand tonnes of imported barley to help balance the shortfall in barley from crop 2021 and appears completely necessary as the current supply chain is struggling to meet maltsters’ demand.
Movement of malting barley from Canada to the USA has reportedly increased, which helps balance the US but adds to the Canadian balance sheet tightness.
Feed barley demand is dropping, as imported corn takes a greater share of feedlot rations, and gradually reduces overall barley demand which aides maltsters in the end.
The price indication for Canadian malting barley, FOB Vancouver has been increased slightly and once again is an indicative price indication which maintains a healthy price premium for Canada. With a deficit situation in North America, the market remains largely on import parity pricing and exports to non-US markets will be curtailed.
In terms of feed barley prices, as mentioned previously, the import of US corn will eventually start to weigh on feed barley prices but to-date a CAD40/tonne premium over corn is in place. The earlier logistics problems reported are being cleared and the volume of corn imports is ramping up significantly. It is reported that nearly 100% of cattle feeders are starting to put corn into feeding rations and once this conversion is in place, the use of corn will extend through 2022.
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