USA: Malting, feed barley markets saw slight price rallies in December
Heading into the final month of 2007, both feed and malting barley markets saw slight price rallies at several local elevators while in other locations the markets held their ground, Farm & Ranch Guide reported December 20.
The strengthening for both classes was a result of little barley movement by farmers according to Larry Raap, grain merchandiser for Sun Prairie Grain in Minot, N.D.
In addition, feed barley prices received some support from potential export sales and the latest USDA Feed Outlook report that trimmed the world carryover stocks of barley even more.
“We just see a lack of movement as far as barley is concerned,” Raap said. “Since the highs of around $6.25 to the producer, the prices have dropped off and what free stocks of barley are out there they are just sitting on, hoping the price will get better again.
“And on the feed side the prices have improved. There for a while it was down around the $4.80 level, but now it's back to over $5 again, and it's basically the export business that's continuing to drive the feed market,” he continued.
“And some of the maltsters are getting a little more aggressive, depending on who needs some, so there seems to be a little bit of life in the barley market again. And the other markets like wheat, durum and whatever are adding support as well,” he added.
Malting barley contracts in the Minot area filled up rapidly.
“We had a quota of x amount of bushels to fill this year and they are all gone,” he said. “It's been two to three weeks since we have had a new crop malting bid just because we have used up all of our bushels.”
The offered contract prices of $5 or better, coupled with the lower input costs associated with barley, encouraged many farmers in the north central region of the state to contract acres early.
“With those contract prices and the lower input costs for barley, barley seemed to pencil out better than anything and farmers filled out contract quota,” he said.
Looking to the future, Raap said it's anyone's guess what might happen, noting that even predicting from one hour to the next is rather tough to do.
He used the example of wheat futures on the day of our visit, which started the day down 12 or 13 cents and ended the day up 26 cents. But he did say that if we start to see barley get up close to the $6 area, there will be an increase in barley movement.
The Dec. 13 Feed Outlook report from the Economic Research Service (ERS) branch of USDA indicated the projection for world barley production declined 0.8 million tons from the November report. World barley production for the 2007/08 marketing year is now pegged at 133.7 million tons.
The Russian crop is expected to be 0.5 million tons lower than last month's figure, however, due to a 10 percent boost in harvested acres, the Australian crop is now expected to increase by 0.3 million tons over the previous estimate.
The ERS expects little growth in barley consumption due to the tight supplies worldwide. The service did raise the prices they expect U.S. farmers to receive by 15 cents on each end of the scale to $3.70 to $4.30 per bushel, up from the previous record of $2.89 per bushel in 1995/96. Barley prices averaged $2.85 per bushel in 2006/07.
Checking local elevator prices for feed and malting barley classes on the website smallgrains.org indicated markets steady to slightly higher for both classes.
Feed prices advanced from as little as a nickel to as much as 40 cents a bushel with prices ranging from $4.50 to $5 a bushel.
Malting barley prices were quoted from a low of $4.75 to a high of $5.90 a bushel, with prices steady to 15 to 30 cents higher.
Some elevators were quoting the same price for feed and malting barley classes, while others were showing a price differential of as much as 85 cents a bushel, with an average differential of around 40 cents a bushel.
21 December, 2007
