UK Barley: Grain Market Daily

ADS Alex Cook Trainee Analyst 024 7647 8

 

Alex Cook, Trainee Analyst, AHDB Market Intelligence
Alex.Cook@ahdb.org.uk, 02476 935746

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What is the state of play for UK barley markets?

Last week, UK feed barley markets continued to follow the downward trend seen throughout this year. Large availability, positive new crop prospects and lacking demand have largely provided a ceiling on market direction.

Maize has featured heavily in feed usage this season. Usage of whole and flaked maize in animal feed production is up 80.4% on last year. The increased maize usage has left barley struggling to find demand in domestic animal feed markets.

Domestic animal feed production statistics for March also show barley usage is at its lowest levels in six years.

With winter feed programmes approaching completion, the window for barley use in animal feed production could be limited further. This is particularly true if maize remains competitive in rations. This w­ill add weight to end of season barley stocks.

With domestic feed demand for barley down, we look to exports as the next available home. UK exports of barley have been relatively quiet this season. A strengthened sterling has pressured prices to remain competitive, particularly with Black sea supplies.

Brexit uncertainty has added further challenges to the barley export market. The delay to Brexit until 31 October, should have given confidence to old-crop export markets. That said with no clarity on export tariffs the picture for new-crop barley remains uncertain.

Looking ahead to new-crop, for a larger barley crop could well be seen in 2019/20. The AHDB Early Bird Survey highlighted a 14% rise in the area intending to be planted to winter barley for 2019/20.

Moreover, the ADAS crop condition report showed 95% of the GB winter barley crop was considered to be in “Good” or “Excellent” condition, as at the end of March. With crops progressing well and an increased area planted this season, barley prices are likely to remain pressured.

The latest Saudi Arabian barley tender for 840Kt was won by mostly Black sea new crop at a CIF price of around £144.66/t for delivery July - August. On 30 April, UK harvest feed barley (FOB) was quoted at £131.50/t.

At this FOB price the UK would not be competitive against the Black Sea market. Depending on freight and exchange rates we may see harvest barley under further pressure in order to find an export market for harvest.

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