April 22 – Barley Weekly GrainCents Digest

This past week we got a ton of updates on how barley planting schedules are looking and how big the 2018/19 global barley crop is going to be.

This past week we got a ton of updates on how barley planting schedules are looking and how big the 2018/19 global barley crop is going to be.

Starting where the world clock starts, Australian 2018/19 barley production is forecasted to hit 9.5 million tonnes. This is up 500,000 tonnes from 2017/18 production.

In Germany, MARS, the EU’s agronomy division sees average winter barley yields at a little more than 132 bushels per acre, down about 1% year-over-year! The German co-op association, DRV, says that winter barley acres in Germany are up 2% year-over-year to a little more than 3.11 million acres. This means total winter barley production in Germany should come in at 9.1 million tonnes, or about 1% higher than last year.

Thanks to some delayed spring seeding in many areas, MARS thinks that spring barley yields could produce an average just over 79 bushels per acre

In Ukraine, MARS sees spring barley yields at just under 62 bushels per acre, just below last year’s average yields. The reason for the decline is the delayed seeding pace, although it did speed up significantly last week as there was better weather. Through mid-April when the Ukrainian Ministry of Agriculture updated its numbers, a little more than 2/3s of spring barley acres have been seeded. This means that a little more than 2.72 million acres have been planted, including over 500,000 acres alone in the 2nd week of April. This pace is still about 27% behind last year’s spring seeding campaign in Ukraine. Something to keep in mind is that winter barley was planted on just under 2 million acres, down 6% year-over-year.

Looking next door into Russia, spring barley planting is behind notably. Through the middle of April, just 662,000 acres of spring barley had been seeded in Russia, according to the Ag Ministry there. This is just 22% of the nearly 3 million acres of spring barley planted by this time a year ago! While the 2018/19 crop is behind, 2017/18 Russian barley exports are ahead. 95% ahead to be exact. Through last week, 4.6 million tonnes of Russian barley had been exported.

Like their winter wheat and durum wheat cereal brothers, spring barley crops in France are at their lowest ratings in 4 years. FranceAgriMer says that the portion of the crop rated good-to-excellent stood at 73% as of last week.  

Here in North America, the USDA attache in Canada says that they’re only expecting Canadian barley production in 2018/19 to climb 1.4% year-over-year to 8 million tonnes. This is a result of lower malt barley acres, and instead, higher feed barley acres due to betters and thus, profitability.

This USDA attache recognizes that there was a much larger portion of the 2017/18 barley crop that was rated malt quality and thus, many farmers have been reluctant to sell this higher quality. Yet, livestock feedstuff demand has grown as cattle-on-feed numbers in Alberta and Saskatchewan hit five-year highs recently. With stronger prices, less Canadian cattle are getting shipped into the US, meaning there are a lot more animals than usual to feed for this time of year, hence the increased demand.

We also know that there continues to be strong Chinese demand for malt barley, which is part of the reason why Canadian barley exports are kicking butt and taking names.

Looking into 2018, we get Statistics Canada’s first estimate of this incoming crop year this Friday, April 27th. Historically-speaking, the estimate that gets published in March tends to be lowered by an average of 1.3% by the final acreage number in December. 

That being said, the USDA Canadian attache is expecting Canadian barley acres to fall 10% below their five-year average. As such, total Canadian barley exports will fall 35% year-over-year to 1.3 million tonnes, on ample global supply (everyone is chasing good prices!) and an expected smaller Canadian malted barley crop.

The key question we’re asking is if this weather delays Plant 2018 in Western Canada, will barley acres shift higher? Maybe a bit early to speculate on an answer but it’s worth asking these sort of questions.

On that note, you’ll notice that some of the factors have changed recently. As we are headed into a new calendar quarter and we are getting into the 2018/19 North American growing season, we needed to re-calibrate on what’s really influencing markets going forward. As such, here’s the breakdown of the barley factors that we’re watching going forward!

 

Bullish

Tighter American & Global Barley Stocks

Smaller 2017/18 Australian Barley Crop

Contrarian Optimism For Barley

 

Bearish

Are Malt Barley Buyers Really Covered?

US Corn Going Into Canada Not Good For Barley

Less Livestock in Canada Not Good For Barley Prices

 

Noise/Other

European Barley Crop Not Too Bad

U.S. Trade Deals Under Trump Administration

Barley Sales Recommendations & Weekly Digest

 

If you are not at 20% sold on 2018/19 new crop feed barley, we’d strongly recommend you get it posted on the FarmLead Marketplace today. For 2018/19 new crop, remain at 0% sold on malt barley.

For 2017/18 old crop, we are sitting at 90% sold on feed barley and 40% sold on malt barley.

Have a great week!

– Brennan, Garrett, and Adrian

 

 

April 18 – Who’s Running The Show for US Free Trade?

April 15 – Barley Weekly GrainCents Digest

April 8 – Barley Weekly GrainCents Digest

April 6 – New Record For Canadian Malt Barley Exports

April 6 – More Optimism for UK Barley Crop in 2018

April 5 – Will Bill C-49 Be Enough to Fix Canada’s Rail Problems?

April 5 – EU Spring Barley Expected to Hold Bigger Responsibility in 2018

April 4 – Will Barley Be a Part of any NAFTA Re-Negotiation?

About the Author
Brennan Turner

Brennan Turner is the CEO of FarmLead.com, North America’s Grain Marketplace. He holds a degree in economics from Yale University and spent time on Wall Street in commodity trade and analysis before starting FarmLead. In 2017, Brennan was named to Fast Company’s List of Most Creative People in Business and, in 2018, a Henry Crown Fellow. He is originally from Foam Lake, Saskatchewan where his family started farming the land nearly 100 years ago (and still do to this day!). Brennan's unique grain markets analysis can be found in everything from small-town print newspapers to large media outlets such as Bloomberg and Reuters.