WITH global grain markets hitting contract lows this week barley has provided a rare bright spot for Australian growers.
Feed barley prices remain in excess of $230 a tonne delivered port in the southern states, where the majority of barley production will take place, grading up to $270/t delivered Darling Downs in Queensland.
Clear Grain Exchange managing director Nathan Cattle said this was a sharp contrast to last year.
“Feed barley is in demand with buyers chasing some volume,” Mr Cattle said.
He said this had meant bid prices on the Clear exchange lift over the week to see values a whopping $50-100/t higher than this time last year.
In contrast, Commonwealth Bank commodity analyst Tobin Gorey said March wheat futures on the Chicago Board of Trade (CBOT) exchange had dropped to contract lows.
On Tuesday the CBOT futures price for soft red winter wheat (SRW) hit a low of US412 cents a bushel, which translates to an Australian dollar value of around $201/t.
Spreads between feed barley and APW range from between $10/t and $30/t in various areas, a far cry from most years, where spreads of $60/t or more are not uncommon.
Malcolm Bartholomaeus, Bartholomaeus Consulting, said in contrast to other grains, the global balance sheet for barley is fairly tight.
“There was not the big carryover stocks in barley there were in other commodities,” he said.
He said there had been a big reversal in fortunes for barley producers in Australia after the low prices, down to $110/t delivered upcountry, on offer for feed quality grain last harvest.
Mr Bartholomaeus attributed the gains in barley to a strong sales program and a smaller crop, with a markedly lower plant this season.
This year he said there was still some export demand, while domestic users are also buying barley, although not necessarily in large quantities as buyers assess the stocks available and whether there will be more feed quality wheat to hit the market due to weather induced downgrading.
“There has been very little grower selling as yet, the trade is yet to become truly actively engaged so things remain a little slow,” he said.
Mr Bartholomaeus said Australian wheat values had also held up well, but somewhat paradoxically said the likelihood of downgrading may force quality wheat prices down.
“It sounds a bit contradictory, but the feed guys were buying quality wheat as there was nothing else around, now they may wait to see if some cheaper wheat enters the market, which in turn will mean there is less demand for the quality grades.”