US: Cash barley prices show little movement in the last few weeks

US spot cash prices for both malting and feed barley classes have shown little movement in the last few weeks. This has surprised some in the industry who thought there would be a strengthening for malting barley due to the high percentage of crop that experienced high DON levels and sprout damage, Farm & Ranch Guide reported on December 9.

This hasn't been the case, according to Randy Brag of Valley Grain Milling in Casselton, N.D., because of the concerted effort by the maltsters to try to use as much damaged barley as possible in the malting process.

"According to some of the maltsters, some of this sprouted barley is working quite well," Brag said. "If there is a problem germinating, they are working with it. However, since they are working with sprouted barley you want to get all of that processed by March. If you don't have it processed by March, it's going to die on you.

"(The maltsters) are bending over backward to take some of this stuff, but this is one of those years when they have to," he added.

Brag estimates only 40 percent of this year's barley crop nationwide made top malting specs, while 60 percent fell short. In recent years, as much as 90 percent of the nation's crop was acceptable under the malting standards. Because of the high quality of the past crops, there is some good quality barley that is being held in storage on the commercial level, with very little being held on the farm level.

For those reasons, Brag doesn't expect much of an upturn in cash malting barley prices in the foreseeable future.

However, he wouldn't be surprised to see a slight rally for feed barley, since there is demand building up in the industry.

With growers concentrating lately on marketing wheat, and producers wanting to delay selling grain until after the first of the year for tax purposes, little feed barley is moving and this is increasing demand, which could translate into a small price rally for feed barley.

In terms of malting barley contracts for 2015, Brag has heard figures ranging from $4.75 to $5.40 a bushel and the contracts have been filling up nicely, and most of the maltsters increased their contracted acres for 2015.

"The elevators and maltsters I have talked with indicated growers have been very receptive to the contracts, with many growers wanting to plant more barley than what they could get contracts for," Brag said.

Last year the average contract price for malting barley was probably in the $5.25 area, he noted. Compared to other commodities, this year's malting barley contract offerings are not too far off from last year's figures and most other commodities such as corn, soybeans and wheat can't say that.

"It could be really interesting to see how the malting barley crop is next fall," he said. "If we have any sizeable problem, it could have a big impact on prices."

Average spot cash feed barley prices were in the $2.05 range, while elevator board prices for malting barley were around $4.25 a bushel.

10 December, 2014