After a slow start in the EU, the recent IGC forecast for EU barley output shows some optimism.
Global barley production in 2018/19 was forecasted at 147.7 million tonnes, which shows a growth of 2.4 million tonnes year-over-year.
The moderate winter helped the expectation of a growth in production this year. However, the lingering winter has caused a slow start in spring barley seeding, which casts doubt on the potential of the spring crop.
Last year, the spring crop accounted for over half the total barley output in the EU, which means that late-seeded fields might have lower yields, which could have a negative impact on total barley production.
For example, in France, only 38% of the spring crop was seeded, when last year it was already at 77%.
There has also been delay observed in Russia and Ukraine. Colder weather has put off fertilizer applications and seeding as farmers are waiting for the snow to melt (sound familiar?).
Thus, specifically in Ukraine, the planted area for barley is forecasted to go down as farmers will switch to corn, if planting delays last much longer. Thus, total barley production for Ukraine was recently dropped 500,000 tonnes to 8.2 million for 2018/19.
Despite these delays, in Europe, conditions are getting a bit drier and the weather is becoming more moderate, giving some optimism for the EU barley crop.
EU barley prices are pretty decent though, relative where they’ve been and the alternative: wheat. Thus, planting barley could certainly prove to be very lucrative for EU farmers. Here’s a breakdown of some prices to compare against:
• French feed barley: $205.15 USD / metric tonne (or $4.47 USD and $5.75 CAD / bushel);
• French soft winter wheat: $192.74 USD / metric tonne (or $5.25 USD and $6.75 CAD / bushel).
• Russian feed barley: $216 USD / metric tonne (or $4.70 USD and $6.05 CAD / bushel); and
• Russian 12.5% protein winter wheat: $207.50 USD / metric tonne (or $5.65 USD / bushel and $7.27 CAD / bushel).
What would you plant if you had the choice!?.
Hopes improve, a little, for spring barley sowings, after slow start
Modest weather improvements are offering, some, hope of a pick-up in the pace of barley sowings, whose slow start in Europe and the former Soviet Union has cast a shadow ideas of a recovery production this year, encouraged by firm prices.
The International Grains Council last week, in its first forecast for world barley output in 2018-19, pegged it at 147.7m tonnes – a rise of 2.4m tonnes year on year, and indeed the first growth in three years.
Growth prospects have been helped by a largely benign winter in many major growers of winter barley, notably in the former Soviet Union and in the European Union, the top grower and exporter of the grain.
“A recent spell of freezing weather was considered unlikely to have caused much damage to EU winter crops,” the council said.
However, even if the cold did not prove severe, in terms of duration, it has been unusually extensive, bringing a slow start to sowings of spring crop which, in the EU, for instance, accounted for more than half of overall barley output last year.
Spring barley comprised 31.1m tonnes out of a 60.3m-tonne barley crop overall in 2017, according to industry group Coceral.
The IGC highlighted “lingering uncertainty about the impact of excessively wet conditions in parts of northern Europe,” where it sees spring sowings making up a “slightly larger” proportion of overall area than last year.
Such ideas were underlined by data on Friday showing spring seedings in France at just 38% completed – up 3 points week on week, and well behind the 77% of sowings in the same period of last year.
‘More and more delay’
In Russia, as of Thursday, spring sowing was completed on 150,000 hectares of land, down from 636,000 hectares at the same date last year.
“Spring plantings are registering more and more delay in the Black Sea area,” Agritel said on Friday.
“Because of current cold conditions for the season, producers are less advanced than usual in fertilizer input and barley and pea planting.
“In addition, the thick snow layer which covers the plains of central Ukraine and Russia, except the central district, will induce additional delay of 10 days until the snow melts,” the analysis group said, adding that the setback could see some barley area swapped for that of later seeded crops.
UkrAgroConsult on Tuesday cut by 150,000 hectares, to 2.52m hectares, its forecast for Ukrainian barley area for the 2018 harvest, saying that thanks to the extended winter “the dates of planting early spring crops in Ukraine are going to get shifted, or even narrowed”, with corn picking up some extra area.
The Ukraine barley production forecast was cut by 500,000 tonnes to 8.20m tonnes.
‘Extremely late spring’
At Moscow-based SovEcon, Andrey Sizov Jr, managing director, told Agrimoney that there was “still quite some time” for spring sowing overall, with no alarm over wheat seedings.
However, for earlier seeded crops, such as barley and soybeans, “we need to get this part planted soon.
“The reason of the lag in planting is an extremely late spring.
“If such weather remains intact, sowing area under early crops may be lower than planned,” with the Central reason particularly vulnerable.
In fact, “temperatures remained below normal” in both Europe and the former Soviet Union over the weekend, Radiant Solutions said, noting chill “particularly across Ukraine, Central Region, and Volga Valley”.
And in the former Soviet Union snow is expected this week “in Belarus, far northern Ukraine, and Central Region,” although rains will ease snow cover in southern Ukraine.
Still, in Europe, temperatures have begun “to moderate some” – although with rains now threatening a pick-up in seedings.
Agritel said on Tuesday that “in France, the return of rains will probably hamper the progression of spring plantings.
“With drier conditions these last few days, spring barley sowing have gained momentum.”
‘Barley prices still high’
Slow sowings would threaten farmers’ ability to capitalise on elevated prices of barley, which have unusually even in the feed market have gained a premium to wheat.
French barley “prices are still high due to reduced availabilities at world scale and the strong appetite of China and Saudi Arabia”, Agritel said, pegging feed barley values for July in the port of Rouen at E166.00 a tonne, a E10-a-tonne premium to wheat.
That premium was up from E7.00 a tonne a week ago, and E5.00 a tonne at the start of the month.
A year ago, wheat held a premium to feed barley of E27.00 a tonne in Rouen.
In Russia, SovEcon said that export prices of barley at deep sea held at $216 a tonne week on week, extending their premium over 12.5% protein wheat, values of which eased by $0.50 per tonne to $207.50 per tonne.