UK: UK barley balance estimate remains tight

AHDB released on May 26 its latest UK cereal supply and demand estimates for 2021/22. Since the previous forecasts in March, changing trade dynamics and increased market volatility have impacted import and export forecasts for most commodities, as alluded to in yesterday’s Grain Market Daily. Changes to trade, in turn, has led to a shift in cereal usage by some sectors.

The barley balance remains tight in the latest estimates at 1.819 mln tonnes. For context, if this is realised this would be the smallest balance since 2007/08, when the UK had a circa 5 mln tonne crop. Compared with March, total domestic consumption is expected to be down slightly by 18 thousand tonnes, at 6.270 mln tonnes. Animal feed usage is forecast to fall by 22 thousand tonnes compared to March’s estimates, as other grains have become more price competitive. That said, the decline is halted somewhat as cereal inclusions as a whole have been higher than initially expected, with the slower than expected contraction in the national pig herd driving much of this.

Similar to wheat, UK barley was very competitive on the European market earlier in the spring, which has led to full season exports being revised up to 765 thousand tonnes. Taking all of this into account, barley carry out stocks are estimated at 1.054 mln tonnes, marginally (+3 thousand tonnes) up from March, but remain the tightest in nearly a decade.

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