Circumstances have conspired to enable barley price to rise above wheat for the first time in many years. But this situation will not continue..
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International grain markets entered 2018 largely flat but they appear to have dipped this week for nearby positions. The definite exception has been barley which has increased in price due to international scarcity. Having been discounted by as much as €18/t to wheat last June, spot barley traded up to €2/t above wheat early this week – a €20/t price turnaround.
On page 35 this week we state a number of real concerns for grain production in 2018. While it must be reinforced that these are still only concerns, the areas discussed represent the potential for a significant decline in global production in 2018, should they come to fruition.
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A number of these issues have become more severe since this report was written but there is no guarantee that damage has occurred. Recent springs brought similar concerns but they finished up producing record crops. Most winter-related issues relate to winter wheat and the risk of low temperatures with insufficient snow cover to cause winter kill is the concern.
Native prices are broadly flat and it is the fact that you can sell barley and not wheat which has pushed barley price above wheat, at least for the moment. Spot wheat and barley are technically the same at €173/t to €175/t but it is easier to sell barley at €175/t than wheat at €173/t. May wheat is about €2/t higher than spot but it may be difficult to sell barley forward even at parity. Nominal November prices put wheat around €170/t to €173/t and barley at €165/t to €167/t.
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International grain markets entered 2018 largely flat but they appear to have dipped this week for nearby positions. The definite exception has been barley which has increased in price due to international scarcity. Having been discounted by as much as €18/t to wheat last June, spot barley traded up to €2/t above wheat early this week – a €20/t price turnaround.
On page 35 this week we state a number of real concerns for grain production in 2018. While it must be reinforced that these are still only concerns, the areas discussed represent the potential for a significant decline in global production in 2018, should they come to fruition.
A number of these issues have become more severe since this report was written but there is no guarantee that damage has occurred. Recent springs brought similar concerns but they finished up producing record crops. Most winter-related issues relate to winter wheat and the risk of low temperatures with insufficient snow cover to cause winter kill is the concern.
Native prices are broadly flat and it is the fact that you can sell barley and not wheat which has pushed barley price above wheat, at least for the moment. Spot wheat and barley are technically the same at €173/t to €175/t but it is easier to sell barley at €175/t than wheat at €173/t. May wheat is about €2/t higher than spot but it may be difficult to sell barley forward even at parity. Nominal November prices put wheat around €170/t to €173/t and barley at €165/t to €167/t.
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