The relatively cheap price of malting barley left from last
year's harvest appears anomalous, despite the large stocks still left to use,
Evergrain said, as it nudged higher its forecast for the 2014 harvest.
Old crop malting barley is trading - at E205 a tonne in the
benchmark French export Moselle market, and at about £195 a tonne in the UK –
at discounts of some E20 and £17-20 a tonne respectively to values being
offered for grain from the 2014 harvest.
The gap appears a reflection of the large supplies left over
from the last harvest, when EU production, at 9.33m tonnes, represented a
surplus of 1.38m tonnes over demand, on Evergrain estimates.
"There is still plenty of malting barley from last year available,"
said Matthias Wree, managing partner at the Swiss-based malting barley trading house.
'Prices will converge'
However, this surplus may find willing buyers, thanks to its
strong specifications, as well as its price discount to new crop.
"Last year's crop is of very good quality. Maltsters would
prefer to use it for the next five years if they could," Mr Wree told
Indeed, they may stick with old crop supplies for a few
weeks longer than normal, rather than switching to grain from the 2014 harvest
with "unknown" specifications.
The result will likely be "that prices of old crop malting
barley and new crop converge", he said
The comments came as Evergrain doubled to 822,000 tonnes its
forecast for the EU's malting barley output surplus for 2014-15.
The upgrade reflected in part a nudge higher by 58,000
tonnes to 8.35m tonnes in the bloc's production of the grain.
However, it was mostly down to a reduced expectation for consumption
of this year's crop, as maltsters stick with old crop supplies by some
two-to-four weeks longer than usual.
Thanks to this effect, EU demand for new crop malting barley
will fall by some 5% year on year to 7.52m tonnes.
Evergrain's production estimates factor in 5-year average
figures for variables such as yield.
EU spring barley crops are reckoned to have got off to a
broadly favourable start, albeit with sown areas depressed in many countries
thanks to a benign winter which, in meaning low levels of frost damage to
autumn-sown crops, has limited the need for replanting with spring grains.
FranceAgrimer on Friday pegged at 80% the proportion of spring barley rated "good" or "excellent", down one point week on week, but up two points year on year.
Malting barley consultancy RMI Analytics said last week that
"rather warm temperatures and a lack of rain has led to rising concerns" over crops
in southern and eastern Germany, Poland, Austria and the Czech Republic, where
winter precipitation was "scarce".
"The situation for the spring crop is not overly-critical
yet, but will have to be well-monitored."