On Tuesday, the USDA released the June WASDE report, which offered a few key updates to the global barley crop. Here’s our breakdown of the numbers.
The USDA’s June WASDE report showed the market that American farmers will produce 147 million bushels of barley in 2018/19. This figure was the same as what the USDA reported in May 2018.
Compared to the five-year average of 207 million bushels, 2018/19 American barley production is 60 million bushels or 29% lower.
In the aftermath of the report, barley prices in major regions of the US such as Golden Triangle in Montana were steady.
From a supply and demand balance sheet perspective, we can just look at ending stocks to get an idea of where we sit.
For American barley, 2018/19 carryout is expected to come in at 47 million bushels. This figure was the same as the figure reported last month.
Looking more globally, USDA penciled in some minor bearish changes to both 2017/18 and 2018/19 ending stocks. To begin with, 2017/18 ending stocks are raised 441,000 tonnes month-over-month to 18.55 million in June.
On the new crop front, 2018/19 ending stocks are raised 486,000 million tonnes month-over-month to 17.73 million tonnes in June. We need to point out that the 17.73 million tonnes for the world ending stocks is down 814,000 tonnes or 2% year-over-year.
On the supply side of the world balance sheet, USDA lowered the 2018/19 world production estimate by 610,000 tonnes month-over-month to roughly 147 million tonnes in June. WASDE slashed production estimates in the EU and Ukraine. It also hiked the Argentinian barley estimate month-over-month.
World imports were lowered by 395,000 tonnes month-over-month to 28.8 million tonnes in June. In particular, USDA lowered import estimates in Middle East countries such as Libya and Jordan.
We have to point out that the 147 million tonnes estimate represents an increase of 3.58 million or 3% year-over-year. The production increases are attributed to the likes of the EU, Australia, Canada, and Argentina. In contrast, 2018/19 barley production estimates in Russia and Ukraine are expected to drop in 2018/19 from 2017/18.
Compared to the 5-year average of 142.21, the 2018/19 estimate of 147 million tonnes is 4.55 million tonnes or 3% higher. So from a global standpoint, this could be viewed as bearish.
On the demand side of the world balance sheet, 2018/19 exports were lowered by 400,000 tonnes to 29 million tonnes in June. In particular, USDA slashed export estimates in major barley exporter countries such as the EU and Ukraine. In contrast, they hiked the export estimate in countries such as Argentina.
To sum up, based on today’s reporting we can conclude that the outlook for the US and world barley remains bullish. On the world market front, despite production increases year-over-year reported in 2018/19, world demand is expected to stay strong so that the world ending stocks remain tight.
To get a view of all the major numbers in today’s June 2018 WASDE report, check out the table below and read our live update on the FarmLead Insights page.