Malting barley joined the crops in which Canada has seen disappointing production thanks to hot and dry weather, prompting farmers to hold out for higher prices than maltsters are currently willing to pay.

The Canadian barley crop overall has exceeded initial expectations, thanks to strong yields in Alberta, which prompted the country's farm ministry last week to lift to estimate for the crop by nearly 1.5m tonnes to 10.75m tonnes.

However, the proportion thought likely to be deemed suitable for malting has slid to round about one-third, well below the 50% or more which normally makes the grade, according to RMI Analytics, the Swiss-based consultancy.

"In the southern Prairies, we had dry weather and it was quite warm compared to normal," which promoted protein rates in many crops to unwanted levels, RMI managing partner Darren Smith, who is based in Calgary, Canada, said.

Further north, crops came under disease pressure, after a wet June was followed by warm and dry weather.

"The estimates out there right now are that 3m-3.5m tonnes of the Canadian barley crop will be acceptable for malting," Mr Smith told Agrimoney.com.

Heat victims 

The result adds malting barley to crops including canola and corn in which Canada's harvest this year has fallen short of initial hopes.

The US Department of Agriculture two weeks ago slashed by 1.1m tonnes to 11.7m tonnes its forecast for Canada's corn production this year noting reports that in some regions "hot and dry conditions in July stressed the crop, resulting in poor pollination".

For canola, Canada's farm ministry, AAFC, cut its forecast for the crop by 300,000 tonnes to 15.4m tonnes, warning that in the Prairies, the country's main arable region, yields had come in below expectations, after "heat stress in July and above-normal disease pressure resulted in incomplete filling of pods".

However, many external commentators are factoring in a far lower crop, after high winds earlier this month scattered swathes of canola, scattering seed.

Oil World on Tuesday cut its forecast for Canada's canola harvest by 700,000 tonnes to 15.0m tonnes, while the Canadian Wheat Board has estimated the crop at 14.7m tonnes.

Market stand-off 

The disappointing malting barley crop has left Canada, one of the top three exporters, looking at shipments of some 1.5m tonnes in 2012-13, below typical levels, on RMI estimates.

And it is prompting Canadian farmers to hold out for higher prices for malting barley, of some $350 a tonne in Vancouver, than the $320-330 a tonne that buyers are willing to pay.

"I foresee that deals will end up being struck somewhere in between these levels," Mr Smith said.

The outcome may depend on the results from harvests in Australia and Argentina, which has jumped to top position among barley exporters as growers seek an alternative to wheat, in which government trade curbs are blamed for depressing domestic prices.