Scandinavia: Barley prices saw the most impetuous growth in the last 40 years

Experts confess the market barley is experiencing the steepest price rising per week they have seen after more than 40 years in international grain biz, H. Abildstrom & Co ApS said in its latest report on Scandinavian malting barley of October 16.

Still farmers are watching in excitement the development but recently began to release some of their barley for 2006 delivery. Volumes, however, are small and not causing any relief to the firmness of prices. Anything from just 2 row spring barley, crop 2006 min 93% germinative energy, max 12,5% protein and 3% below 2.2 mm to plain normal pure variety (F. inst Prestige, max 11.5% protein and otherwise full terms) is finding homes.

Sweden is short of higher qualities, exporting lower and importing higher to meet domestic needs. Finland is concentrating on feed barley , free market, intervention barley as well as food-aid.
Meantime, farmers are also there “sitting on” considerable amounts of different qualities of malting barley, which domestic maltsters obviously trying to get hold of.

Denmark is still expected to have a decent surplus of various qualities (full range as above) question is how much remains unsold. Analysts have reasons to believe that due to the reluctance by farmers to sell their stuff and the collectors` understandable abstaining from selling short, there are still some hundred thousand tons but not in the pipe line.

With all rapeseed and unchanged or slightly bigger wheat areas which mean less space for spring crops, experts would guess spring barley could be down 3-6% in Denmark and Sweden.

Under the circumstances of the prefigured 2006 crop, there will be a need all the skill of the industries (maltsters, millers, compounders) to make most out of the available material in order to become self-sufficient inside EU 25, forget about import-opportunities and obtain some support and flexibility from their clients.

The grade of success in achieving the goal will eventually direct the prices, and with due respect towards the technicians and purchasing managers I should not be surprised if latest in April and/or May prices could have found the peak. Good sowing conditions commencing in the south and spreading northwards could support a turning. Against a drop/fall could be the effects of eventual entering on the market by U.K. maltsters for the spring months up to first new French material.

2007 crop seems to be affected by more economical crops for the farmers. Areas of spring barley will be smaller at least in Western part of Europe and the accumulated demand from end of 2006 season will keep price level for 2007/08 rather stable and unlikely make 2005 prices possible to see again for the next 1-2 years.

The market is featured by individual conclusions which due to mutual lack of interest in broadcasting prices make a real market report impossible. When a market is moving so fast, it does not make sense to report anyway since the level for the next business will be different – even on the same day.

The fact that even sellers are finding levels unreal and painful contributes to putting a lid on bookings.
Prices:
Basis 3000 ts, max 14.5% moisture, FOB. 1st half January, 2007:
Crop 2006 Denmark/Sweden optional spring malting barley max 12% protein: nominal 196-199 €/t
Denmark/Sweden 2 row spring barley min 93 germ, 12% max 12.5% protein: nominal 170 €/t

Crop 2007, basis 1st half October, 2007
Denmark/Sweden optional spring malting barley max 11.5% protein: nominal 165-168 €/t

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