Canada: CWB malting barley PRO lower for two-row, unchanged for six-row

The CWB released its latest Pool Return Outlook (PRO) for the 2007-08 crop year and the first PRO of the year for feed barley in Pool B, which runs from Feb. 1 to July 31, 2008, according to CWB’s press release, November 22. The PRO for Pool A feed barley is unchanged from last month. Two-row malting barley is $3 lower, while six-row is unchanged.

PRO commentary 2007-08 crop year

Feed barley

Pool A - The small pool size of Pool A reflects limited delivery opportunities due to logistical capacity constraints in the Pool A delivery window. The feed-grain situation in Europe has stabilized as corn from Latin America and sorghum from the U.S. have reached the market. Corn continues to provide a price floor for feed barley; however, the corn-wheat spread has narrowed over the past month.

Pool B - The feed barley market is expected to remain highly volatile. Saudi Arabia has uncovered demand but, given high ocean-freight rates, Canada has a significant freight disadvantage for shipping to Saudi Arabia relative to Europe. The tightness of the global feed grain supply situation should ease as a record-sized U.S. corn crop will be available for export and new-crop corn will be available from Argentina and Brazil in spring 2008. Feed barley exports from the Black Sea region will be limited as Ukraine continues to limit exports and Russia has implemented a 30-per-cent export tax on barley.

Designated barley

Malt barley prices have been volatile over the past month. Demand continues to be sluggish as buyers are well covered. However, quality concerns in Canada and the U.S., as well as recent frost in Argentina, are supportive of malt barley prices. The Australian malt barley crop also has quality concerns related to high protein levels and reduced test weights. Depending on how extensive frost damage is in Argentina, malting barley prices could move higher.

23 November, 2007