Australian weather will determine the future of malting barley prices, with forecast rains holding the potential to dash expectations of a price falls, the Canadian Wheat Board has said.

Australia's overall barley production looks on course to top 8m tonnes, a level high by historical standards, and more than the 7.6m tonnes the US Department of Agriculture is forecasting, the board said.

"It has the potential to put significant pressure on world malting barley prices," the CWB said.

However, recent rains, a continuation of the moisture which has encouraged "bumper" yields, are already raising fears of crop downgrades and "causing concern about the eventual amount of malting barley available".

And further rainfall looks imminent, Luke Mathews at Commonwealth Bank of Australia said, citing moisture levels as the "primary threat to east coast crops".

"Grain quality will deteriorate for northern New South Wales and Queensland crops, while yields in southern New South Wales and Victoria are liable due to forecast heavy widespread rain this weekend," he said.

Durum squeeze 

The comments came as the CWB warned that quality concerns, which have already fostered wider premiums for higher grade wheat, were being reflected in other grains too.

"It is becoming increasingly clear that the world's tradable durum supply is going to be short of higher quality," the board said, citing early autumn frost and rains which have reduced Canada's supplies of top grade crop.

"There is sufficient Canadian quantity to satisfy world demand, but it will be a challenge to accommodate all of the customers that desire Numbers 1 and 2 Canada western amber durum," the highest grades.

Meanwhile, for oats, UK grain merchant Gleadell warned over a shortage of milling grade grain, again thanks largely to Australian and Canadian setbacks.

"The news for the buyers of milling oats is not improving with continued drought conditions in Western Australia further reducing the world supply," Gleadell said.