USA: Uncertainty over the crop puts barley markets in a 'wait and see' situation

The barley crop is developing nicely, but there are some issues with the crop, at least in some parts of the growing region, Randy Brag, manager of Valley Grain Services Milling in Casselton and Beulah, was quoted as saying by The Prairie Star on June, 26.

"Here in Cass County I have noticed that some of the barley crop looks like it was mudded in and maybe have some leaf disease issues. Some of those fields haven't stooled out real well. It looks like an average crop, not a bin buster crop coming," Brag said.

This uncertainty over the crop at this time will likely give some support to barley prices, he noted, thus not letting them slip too much, at least for now as the markets take a 'wait and see' approach.

"It seems like all of the buyers are in that wait and see mode," he said. "Nobody's thinking about doing much business until they start having a good idea of what the crop is. And that's putting everything on the flat side with barley. We aren't seeing the prices going up or down every day as we do with corn."

If growing conditions allow the contracted acres to fill the bushel requirements, there will be little additional demand for cash malting barley, since the maltsters have issued contracts for most of their needs. However, if the quality or yields suffer the maltsters will be looking to the open market to supply some of their needs, which could be supportive of prices. Brag noted that many growers planted barley for the open market this year, if they could find the seed.

"This year there is more barley in the eastern part of North Dakota than we have seen in years, so we do have barley spread around to other areas," he said. "Production of barley in Cass and Traill counties and over on the Minnesota side is up."

Prices at harvest time could also be a factor, according to Brag, in determining whether a producer will deliver open market barley right off the field or put it in storage.

"The farmers have a large amount of storage open right now," he said. "Some of that will likely be used for corn, but if the barley prices aren't attractive enough at harvest time, we could see a lot of that crop going into storage as farmers wait for a better price."

Of course this will depend on each farmer's situation, he added. If their finances require making payments at that time, then the crop will sold.

27 June, 2012