Australian grain marketer ABB Grain Ltd. cut on June 2 its estimate of returns for collective sales of feed barley grown last crop year, reflecting expectations of a good European crop, according to Dow Jones. The cut of A$8 a metric ton reduces its estimate of returns from its number one pool to a gross range of A$172-A$182/ton, and cuts its estimated returns for its number two pool back to a gross range of A$147-$167 a ton, it said.

Michael Iwaniw, the company's managing director, said the decrease reflects international customer views of the new European crop, in comparison with available supplies from Australia, an alternative global supplier. "Customers don't want to purchase a year's supply of grain at one time, and so the large (old) crop produced by Australia was always going to be sold over an extended period," he said in a statement. "With the expectation of a good crop soon to be harvested in Europe, buyers have scaled back their purchases to only service their immediate needs, preferring to run down their already existing stocks," he added.

That said, old crop feed barley is good quality and was harvested under good conditions, which should bode well for future sales, he said. With some parts of Australia suffering dry weather, more of the old crop will be used domestically as the need for stockfeed grows, he said. Looking to the local season ahead, the large size of the European crop will put downward pressure on prices, he said.

ABB Grain holds an export monopoly over barley produced in South Australia, and accumulates barley and other grains elsewhere, some of which it sells through collective sales pools.

04 June, 2004