Canada: Malting barley PROs unchanged, feed barley up 10%

The CWB released its latest Pool Return Outlook (PRO) for the 2007-08 crop year. Feed barley is up $10 per tonne while malting barley values remain unchanged from the November PRO, according to CWB’s press release, December 20.

Malting barley

Malting barley prices were mostly stable to slightly down during the past month due mainly to sluggish world demand. However, limited supplies caused by lower production and quality issues in Canada, EU, Australia and Argentina continue to provide underlying support for the malting barely market. Tight supplies will continue until the new crop harvest in August 2008.

Feed barley

Pool A - A very small pool size reflects limited delivery opportunities due to logistical capacity restraints for moving grain to port. Limited exports from the Black Sea and production problems in Europe have reduced the available supply of feed grains for the world. This has kept global feed barley fundamentals tight, supporting high prices.

Pool B - The world feed-grain situation continues to be tight. Statistics Canada reduced Canada's barley production by close to 900 000 tonnes, which further tightened the global barley market. Saudi Arabia continues to have uncovered demand for the spring of 2008 and is expected to come into the market soon to cover this position. Given record high ocean freight rates, Canada is at a disadvantage for shipping feed barley to Saudi Arabia. The record corn crop that was harvested in the U.S. continues to be exported at a rapid pace, which is supporting feed grain prices globally. The price of corn has also increased over the past month due to the competition for acreage with oilseeds and wheat. Ukraine continues to limit barley exports and Russia has implemented a 30-per-cent export tax.

21 December, 2007