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Mixed quality in UK spring barley and bumper crops in EU
DAN BUGLASS

VERY little of the Scottish spring barley crop has so far been harvested, but the early samples of Optic intended for the malting trade have been decidedly mixed.

This week will be critical for the malting barley crop. Further rain will inevitably result in weathering and poor quality, according to Euan Cunningham, a grain trader with WN Lindsay, who operated over a large territory in south and central Scotland.

He said: "We saw some Optic yesterday which had been combined over the weekend and the quality was surprisingly good, but it's going to be down to the weather from now on."

Some of the last of the Pearl winter barley is reported to be badly sprouted. However, the situation with oilseed rape is approaching disaster proportions, with reports of up to 50% of the crop sprouted with the result that it will be heavily discounted even from the current low price level. The trade is reluctant to discuss values for malting barley at this stage other than to state that the maltsters will be looking to secure a sizeable share of the Scottish crop, probably in the region of 500,000 to 600,000 tonnes.

In England, it is estimated that around 25% of the spring barley crop is safely in store, but early reports indicate mixed quality. On mainland Europe there are signs of a bumper crop, according to Josh Dadd, of the Home Grown Cereals Authority.

He said: "With the EU harvest well under way, early indications are for a good malting barley crop. France and Germany have reported excellent crops, and despite waiting for the quality news from the UK and Denmark, the market is working under the assumption that the EU malting barley surplus will be greater than previously though. This has put pressure on prices in recent weeks."

Very little wheat will be harvested in Scotland before the beginning of September, and even in England HGCA reckons only 10% of the crop has been combined.

Major concerns about quality have pushed the premium for milling to ?19 per tonne over feed grain. It looks increasingly likely that a substantial quantity of the UK wheat crop will be destined for intervention in November. With sterling edging lower against the euro, it is projected the intervention price will be around ?69 per tonne delivered.

On the international front, the US appears to be heading for a record maize crop of close to 277 million tonnes. This would be 20 million tonnes, roughly the size of the entire UK cereal crop, higher than the previous record. In addition, the US department of agriculture has again raised its assessment of world wheat stocks for 2004/05 by 10.6 million tonnes to 608 million tonnes. World demand for wheat is also expected to increase to 598.6 million tonnes. In the medium term this is likely to put pressure on world stocks which now stand at only 142 million tonnes. Any major climatic event could impact very rapidly on prices.

The Herald

18 August, 2004