The latest AHDB report shows malting barley premiums remain high at the moment. As of 12th October, the gap between the UK average spot ex-farm price for premium malting barley and feed barley was £71.20/t. In the same week last year, it was £28.60/t.
AHDB Early Balance Sheet estimates total barley availability was estimated at 8.336 Mt, down 101 Kt on the year, due to a smaller crop outweighing a rise in opening stocks. Availability is also slightly down on the previous five-year average of 8.595 Mt.
On top of an overall decline in availability, the proportion of the crop that is meeting the higher quality malting requirements is expected to be lower. The Cereal Quality Survey results published late October showed lower specific weights, poorer screening levels and high average moisture content year-on-year. Though nitrogen content for both winter and spring barley was comparable to last year and marginally higher than the three-year average.
Malting barley global availability is estimated to be tighter this season. Total global production of barley in 2023/24 is forecast to be the lowest since 2018/19, and global ending stocks are expected to be the lowest since the early 1980’s. Much like the domestic picture, quality is a concern elsewhere as well, with the wet weather in Europe at the beginning of harvest impacting the crop due to delayed cutting.
Despite the cost-of-living crisis, brewer, maltster and distiller usage is estimated to be up on the year, distilling demand is expected to remain robust from increased capacity coming online last season. A tighter outlook for barley both domestically and globally means premiums are likely to remain firm, at least in the short-term.
The prediction of a slowing in downward pressure on wheat prices has proved a correct one. UK feed wheat futures (Nov-23) closed at £185.50/t yesterday, slightly up on the week before. The Nov-24 contract was also up over the same period, ending the session at £206.00/t.
Traders continue to monitor tensions in the Black Sea region. The shipping corridor is still operating (Refinitiv) although Ukraine has reported Russian warplanes had targeted the region yesterday.
There wasn’t a great shift in Paris rapeseed futures. The Nov-24 contract held on to previous gains, ending the session at €447.00/t. Paris rapeseed futures (May-24) fell by €1.25/t on November 1st, closing at €439.00/t.
