US: Maltsters keep bids for malting barley ‘pretty competitive’ – industry source
Barley prices have held their own over the past couple weeks as the recent high corn prices caused some switch to feed barley as a concentrate source and maltsters worked to fill the last remaining contracts, Kayla Hoffman, a grain merchandiser for Sun Prairie Grain in Minot, N.D, was quoted as saying by Farm & Ranch Guide on April, 28.
“The maltsters are trying to get those last few acres booked by keeping their bids pretty competitive,” Hoffman said. “Right now they are at $6.10 a bushel, which is a pretty aggressive price. It’s been holding its own despite the fall in the corn and wheat markets that we have been experiencing this past week. (The maltsters) still want some acres and I think their bid reflects that.”
Feed barley prices have also remained strong due in part to an increased demand caused by some switching from corn to another feed source.
“Feed barley is reaching values we haven’t seen in a while,” Hoffman said. “We are seeing prices of $4.70 to $5 for feed barley right now and that’s a great price. There has been some fluctuation, where we will see corn and wheat go down 20 cents and we might lose a nickel or a dime in feed barley. And I think the strong malting barley prices have helped support the feed barley market.”
Cash malting barley prices have also shown strength in recent days, as maltsters are buying some barley on the open market to replace some bushels they had under contract but went out of condition during storage.
“They have been out buying open market barley and that’s due to heat and other damage some of their contracted barley has suffered while being stored in the bin,” she noted. “Some of these open market guys lucked out. If the contracted bushels would have stayed in condition the maltsters wouldn’t be looking so aggressively for open market barley.”
Hoffman said the barley industry was anticipating an even larger drop in barley acres this spring, especially in North Dakota. But she believes the current good prices actually caused some growers to take a second look at barley and they decided to put some of their acres into barley.
Barley acreage in North Dakota is estimated at 690,000 acres, or a four percent decrease from last year’s acreage. That marks the lowest acreage on record for barley production in the state. On a nationwide basis barley plantings are expected to increase by 3 percent to 2.95 million acres. If realized, this barley planting figure would be the second lowest on record in the U.S, which was set last year.
Due to the wet conditions this spring, which will likely bring a delay in field work, Hoffman said there might be some shifting in those initial spring planting intentions. If it happened that some added more barley acres to their rotation plan it would likely cause a softening in the cash barley prices.
“Farmers around Minot are saying it might be the middle of May before they get in the fields, but I’m trying to be a little more optimistic than that,” she said. “But, it’s hard to say – the weather is the biggest wild card out there.”
Spot cash prices for malting barley averaged around $5.25 in the state on April 15.
The latest U.S. Grains Council reported indicated there were no export sales or shipments of barley during the past week. But it may be some time before Russia resumes its role as a barley exporter.
According to a recent report in the Financial Times, Russia has announced it will extend its existing export ban on cereals for some months yet. The country’s government is trying to ensure that it has enough barley, along with other cereal grains, to fulfil its own domestic needs after the dismal harvest most of the country experienced last year.
29 April, 2011
