Malting barley prices are not likely to move

Prairie farmers are still hoping for higher durum prices, but most have accepted that malting barley prices aren’t going to get much better, say farm marketing advisers.

Most of the available supply has been sold or priced, so farmers will be mostly spectators on the sidelines of a world bull market.

“Farmers just have to accept the fact that a fair chunk of both the durum and the malt barley has been priced out,” said Charlie Pearson of Alberta Agriculture.

Farmers’ hopes had been raised by reports that countries fearing food price protests had been buying up durum. As well, there are widespread reports that the world has little malting barley left after harvest-time flooding devastated the Australian crop.

However, the Canadian Wheat Board’s January Pool Return Outlook, while showing stronger wheat and durum prices, did not have happy surprises. Durum rose only by about the same amount as milling wheat.

Most durum grades and protein levels rose 35 to 47 cents per bushel, reaching $8.33 for No. 1 C WAD 13 percent protein and $7.46 for No. 2 CWAD 11.5 at port.

Most wheat grades and classes rose 39 to 46 cents per bu.
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Malting barley hardly rose at all, with two-row rising four cents per bu. to $5.53 and six-row rising four cents to $5.16.

Mike Krueger of the Money Farm market analysis firm in Fargo, North Dakota, said old crop malting barley bids for Minneapolis delivery have been $5.75 per bu., or a cash price of $5 per bu., and new crop malting barley is being contracted for $6 per bu. for Fargo delivery.

Wheat board analysts said in PR O commentaries that malting barley buyers have not raised prices or chased dwindling supplies of the grain, instead choosing to lower their specifications.

“We don’t see a considerable run-up in prices like we saw in similar years of tight supply (like) 2007-08,” said CWB analyst Neil Townsend.

Nor have feed barley prices risen as many expected, even though the Russian crop was badly stunted by drought.

“It hasn’t had that kind of electric surge in prices that you might think it would have,” said Townsend.

That has allowed malting barley buyers to purchase cheaper feed barley and keep prices restrained.

The story is different in durum.

Krueger said U.S. durum prices have shot high recently, hitting $11 per bu. for marginal quality and $13 to $14 for good quality.

However, he doubts many farmers will have grain to sell at those prices.

“I don’t think there’s a heck of a lot around,” said Krueger.

Townsend was more bullish about world durum prices than malting barley prices.

“This is a generally bullish scenario,” he said about declining durum ending stocks for 2010-11 and probably also for 2011-12.

“We expect the durum world to remain at elevated prices for the remainder of the 2010-11 marketing year and well into the 2011-12 marketing year.”

Jon Driedger of FarmLink Marketing Solutions said he has cautious hopes for higher durum prices in coming PR Os, even though much of the crop has already been priced.

But he holds little hope for a stronger CWB malting barley pool, because of lack of supply.

“There’s almost no malting barley out there to sell at higher prices to take the pool higher,” said Driedger.
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