USA: The lack of movement for both malting and feed barley is helping prop up the prices right now

Farm & Ranch Guide published, March 18, a barley market analyses exposed as following:

“The lack of movement for both malting and feed barley is helping prop up the prices right now, according to Randy Brag of Valley Grain Services in Casselton, but he suggests farmers take a look at selling some of their old crop barley to capitalize on the current record high prices for feed barley. And there is some old, old crop barley out there.

“It's the lack of movement that is supporting this price right now,” Brag said. “First, the weather got cold, and then the snow came, which has pretty well shut down the movement from the farms. The phone is starting to ring a little again, which might indicate a little movement is going to start.

“What we have happening is a little interesting. We have barley coming in that's four, five, up to eight years old crop. And I have been on the phone with someone from Minnesota who claims he has some barley that's 10 years old,” he continued. “And most of this is in pretty good shape for feed barley. It's surprising where this barley is coming out of.

“But I really think those farmers who are holding on to barley should consider pulling the trigger on it,” he added. “With feed barley over three bucks, which is a record high, they should be thinking about getting rid of it.”

At this point, Brag is still confident that barley acreage will be up slightly this year. This opinion is bolstered by his conversations with seed sales people who are telling him that barley seed sales are positive and that there are still some malting barley contract acres that need to be filled. He has also heard that many farmers have already committed a certain number of acres to corn, and are trying to decide whether to plant barley or wheat on their remaining acres.

If enough corn acres are planted this spring and weather conditions prove favorable, Brag expects corn prices to fall back, which would take prices for the other feed grains down with it. And on the other side of the equation, the processors aren't ready to support these high prices and are actually looking for lower prices.

“The processors would like to take these prices down,” he noted. “That's the scary part of this market; we're up at the top of the market and it won't take much selling to get this market to start moving backwards. We've got a window here in March and April to let some of this barley go, but once we get started in the field they aren't going to shut down their field operations and haul grain.

“It basically comes down to do they want to grab a sure thing right now or take a risk that the market is going to fall? The market could be a lot lower come June, especially if the planting rates and growing conditions are doing okay,” he continued.

“We are also seeing about a 45 to 50 cent spread between old crop and new crop barley, with the new crop being lower and that should be an indication of where these prices are going to go sometime in the future,” he added. “At some point those prices need to come together with either the new crop prices coming up or the old crop coming down - and with several of the factors looking promising for a good crop this year, the old crop prices are going to come down. So I guess you could say we are almost in a weather influenced market already.”

The price enhancing factors Brag listed did show up on the local elevator board prices, according to the website smallgrains.org.

Feed barley prices were higher in every location with advances generally in the nickel to a dime higher area, but one elevator had a jump of 60 cents a bushel. The range of feed barley prices was from a low of $2.90 to a high of $3.25 on a local cash basis.

Malting barley prices didn't quite show the strength that feed barley did in the last two weeks. Many stations reported steady malting prices, with a few elevators reporting price increases in the five to ten-cent range. Malting barley prices were reported at $3.30 on the low end and $3.60 on the top side. The average spread between malting and feed barley prices was between 25 to 50 cents per bushel.”

21 March, 2007