Grain markets fell again mid week as the US Department of Agriculture’s initial estimates of world grain supply and demand put stocks higher than the trade had been expecting.
“This report raises more questions than it answers,” said Gleadell’s Jonathan Lane. “It’s a very tricky market with both the EU and the US in weather markets.”
New crop feed wheat at harvest was worth £165/t ex-farm as Farmers Weekly went to press on Wednesday (11 May), with November at £170/t and feed barley worth £8/t less than wheat.
Questions remained about the re-entry of Russia and others to export markets and whether the impact of further crop problems in North America over the past few days had been included in the USDA figures, said Mr Lane.
These forecast world wheat production to rise by 21m tonnes to almost 670m tonnes, but consumption is forecast to rise from 662m tonnes this year to 670.5m tonnes.
The world’s next barley crop is forecast by the International Grains Council at slightly higher than the current season but it is still comparatively low and the UK could see its smallest crop since the 1960s, said HGCA analyst Jack Watts.
“Barley markets are likely to remain volatile in 2011-12 due to specific barley issues and also influences from other grains, mainly maize,” he said.
While demand for beer in the EU is falling, sales are rising in some Asian and other economies at the same time as currency and falling shipping costs have helped UK trade. Malt stocks have fallen and UK malt exports so far this year are 35% higher than the three-year average.
The new crop market has already seen the price for spring barley loaded on to a boat at UK ports rise from £171/t in late November last year to £222/t in early May.
Current crop conditions mean that traders will not sell further malting barley export cargoes until they are sure the grain will be available.