Malting barley under weather
By Olivia Cooper
VARIABLE weather is plaguing the malting barley harvest, affecting both quality and yields, say traders. But prices remain under pressure.
Many malting samples are failing to make the grade, with high nitrogen contents and screenings a common problem, says Glencore Grains Robert Kerr. "The later ones are coming in better, but the first tranche was absolutely appalling." However, maltsters are relaxed as the UK is forecast to harvest about 6.5m tonnes of barley, leaving an exportable surplus almost double that of last season, at about 1.4m tonnes, he adds.
Dalgety has already shipped 30,000t of feed barley to Europe, but higher November values mean the UK will struggle to remain competitive, says the companys Trevor Harriman.
Premiums for Pearl and Regina are steady at about £5/t over feed barley, which is worth £50/t ex-farm for harvest movement. November premiums are slightly better at £8-10/t above the £55-58/t base. But, while intervention offers a firm backstop, farmers should beware stringent quality standards, warn traders.
But it is not all bad news. World feed grain markets are showing signs of improving, with drought severely affecting crops in the US, Canada and Australia. US maize prices have leapt by almost £8/t over the past three weeks, which could help boost European values. "From a global perspective over the rest of the season there is a good chance that prices will be fairly robust," says Gerald Mason, chief economist at the Home-Grown Cereals Authority.
Richard Whitlock, grain director at Banks Cargill, reckons the same can be said of wheat. Rain is hampering harvest, and many consumers are paying up to £10/t premium for quick movement. "But youve got to jump quickly as 24 hours will make a big difference."
While September futures have sunk to new contract lows (below £60/t) in the UK, Chicago values continue to rise as dry weather damages US milling wheat crops. This has opened the door for the EU to supply traditional US export destinations.
"If the UK has good quality, including low moisture, we have a chance of competing in those markets," says Mr Whitlock.
Hopes for wheat quality have reached a critical point this week, with wet weather causing considerable concerns. But David Sheppard of Lincs-based Gleadell Agriculture reports yields of about 8t/ha (3.2t/acre) on early milling wheats being cut midweek.
"That is perfectly acceptable on lightish land, and is probably a good sign for the bulk of the crop to come," he says. "Hagbergs are varying from 200-300, and bushel weights are mainly fine, at 76kg/hl plus."
"But we really need two weeks of sunshine to produce a national crop of this quality, then we will have a chance on the export front." *