Global Barley Market Update

June 12, 2017

The 2017 crop season is well underway with seeding advanced or completed in many of the major barley exporting countries.  We now head into weather market season as analysts monitor the conditions on a weekly basis to assess the impact on projected yields and quality.  We present a summary of seeding progress, crop conditions and market indications in each area.

Australia continues to move their record 2017 barley crop with some reports suggesting China may import over 7 MT (of malting and feed).  Recent export activity has slowed somewhat which may be due to logistical issues more than anything else.  Seeding conditions in Australia are looking favourable due to recent rains in the East where seeding progress exceeds 75%.  South and Western Australia are somewhat drier with seeding approaching 60% complete (remember there is not a limited seeding window as there is in the Northern Hemisphere).  Successful seeding and germination depends primarily on moisture conditions.

The European malting barley market has been quiet with few sellers.  With seeding completed weeks ago, the weather over the next few weeks will impact the market one way or the other as crop development is assessed.   Previously, conditions had been too dry and too cool.  Some 2017 crop estimates have put total EU barley production below last year’s 60 MT.  That may prove to be pessimistic.  Generous rainfall last week across most of Western Europe and expected warming temperatures should advance the crop significantly.  However, continued rains will be necessary in the coming weeks as conditions are drier than normal.  Conditions in Spain, where rainfall has been sparse, are much worse.  Spanish barley production may fall 30% from last year’s 9.27 MT.

The only significant barley market activity recently has been the 1.5 MT Saudi Arabia tender (for July shipment) .  Most of this is expected to be supplied from the Black Sea countries.  However, cool temperatures in Russia have delayed seeding considerably which may firm up values to the point where Russian barley is not competitive.  Russian barley exports are running well behind last year’s pace (2.7 MT to date versus 3.9 MT in 2015-16).  In Ukraine, spring barley seeding is just completed but development has also been slowed due to cool temperatures.  Harvest of winter barley should begin by late June.

Argentina has experienced heavy rainfall in recent weeks which has delayed corn and soybean harvests and subsequently barley seeding.  Some trade sources suggest barley area could decline further if farmers opt for wheat or even corn and soybeans (as a winter crop) due to the wet conditions.  However, there is also an argument for more barley area due to its shorter growing season.  Much will depend just how wet conditions are and farmers’ assessment of which crop is best suited.

Barley seeding in the U.S. is nearing completion which is about two weeks behind normal, due to rainfall and cool weather.  In Western Canada, barley seeding continues to lag behind average, also due to cool temperatures and wet conditions.  However, recent warm temperatures are now advancing progress rapidly.  The areas that continue to struggle with conditions are Northern Alberta and Northern Saskatchewan.  Forecast warm weather should enable rapid progress but there could be an increased vulnerability to poor harvest weather including frost.