Evergrain forecast a decline in European malting barley
premiums as it lifted expectations for the bloc's production surplus this year
for a second time, with benign conditions expected to product an above-average
The European Union will produce an exportable surplus of
spring malting barley of 984,000 tonnes, the Swiss-based trading house said,
lifting its forecast by 162,000 tonnes.
The revision, which followed an upgrade two months ago,
reflected an improvement to 8.51m tonnes, from 8.35m tonnes, in the forecast
for spring malting barley output, in turn down to improved prospects for the barley
The forecast assumes that 30% of EU spring barley is deemed suitable
for malting, in line with the five-year average, with weather, and particularly
the perennial risk of harvest-time rains, still possessing the potential to
cause significant swings in that figure.
European output of barley overall could hit 58m tonnes,
Evergrain said, raising its estimate by
2m tonnes, to a level above that from many other analysts, such as the US
Department of Agriculture, which forecasts a 55.7m-tonne crop.
Strategie Grains estimates output at 55.9m tonnes, while the
European Commission last week pegged the harvest at 55.44m tonnes.
Evergrain, citing evidence from crop visits, said that the
EU spring barley yield was on track to hit 4.11 tonnes per hectare, topping the
EU average by 0.23 tonnes per hectare.
"The combination of excellent planting conditions makes us
feel comfortable to forecast such a strong yield," the trading house said.
The European Commission's Mars agricultural meteorology division
last month pegged the spring barley yield at 4.04 tonnes per hectare, compared
with an average of 3.94 tonnes per hectare on its estimates, although it is
expected to revise its crop data this week.
The prospects of a strong harvest, which is just beginning
in Spain, but is some still one to two months away in northern Europe, have
already begun to be felt in barley prices, which have also been weighed by lower
values of other grains.
"After many months of price support, we begin to see barley
prices start to weaken and factor in the highly likely global barley surplus that
will be built for next year," Evergrain said.
Malting barley prices in France, the EU's top malting barley
exporter and a much-watched market, have lost some of their premium over feed
barley too, with the advantage falling from more than E50 a tonne to E40 a
tonne for new crop over the past month or so.
"For a while, the market did get support from concerns over
the crop in France," which sent prices in the port of Moselle to E230 a tonne.
"But now the market is more comfortable. There is still some
room for the malting barley premium to come down further," Mr Wree told
The average malting barley premium in France is E25-30 a
The comments come ahead of the start of a tour of the French
barley crop by consultancy RMI Analytics, which in late May said that "crop
conditions look excellent throughout Europe with the weather varying between
cool temperatures, rain and longer sunny and dry periods".
FranceAgriMer, the official French crop bureau, on Friday rated the domestic spring barley crop at 69% in "good" or "excellent" condition, down 1 point week on week, and 3 points year on year, but a strong figure nonetheless.