Upbeat results from the early European harvest, and the promising condition of remaining crops, have prompted a slump in malting barley prices to their lowest in one benchmark port for some four seasons.
Prices of grains overall have softened in Europe this week, undermined by an improvement in French harvest results, from a disappointing start in the south of the country, as well as by weakness in world markets thanks to hopes for huge US corn and soybean crops.
However, malting barley prices have taken a particular tumble, suffering a drop too in the premium over feed barley to some E20 a tonne, from levels of about E40-45 a tonne two weeks ago.
Lowest in four seasons
On the Paris futures market, malting barley for November delivery, while making a small recovery on Friday to E204.00 a tonne, was down nearly 7% this week.
It hit E202.00 a tonne in the last session, the lowest for a spot contract since May last year.
At the Parisian port of Moselle, prices have fallen from E215 a week ago to a little under E200 a tonne, according to Michael Fleischer at RMI Analytics, the Swiss-based consultancy.
"We have not seen prices below E200 a tonne in Moselle since 2009-10," Mr Fleischer told Agrimoney.com.
Recovery from poor start
The drop in prices reflects increasing confidence in a crop over which there had been significant nervousness, given a relatively warm European winter - which meant relatively little damage to winter cereals, and so little need to resow with spring crops such as spring barley, the source of most European malting grain.
This was followed by a cold spring, which got many spring crops off to a poor start, and indeed a crop tour in Germany last month had come up with uninspiring results.
However, prices took a knock a week later, when the UK revealed that spring barley area was likely, on a harvested basis, to hit 922,000 hectares – up more than 50% year on year, and a figure deemed potentially a record, after a dismal autumn sowing period.
More recent harvest results, from countries including the UK, have underlined the prospects for decent malting barley supplies.
"We are looking at yields which are average or above average, and good quality," Mr Fleischer said.
"The supply and demand situation is very different to expectations a couple of months ago."
Hopes of a decent European harvest have been underlined by an RMI crop tour to the Nordic countries this week, which the consultancy said had shown yields in the south of Sweden of 6.2-8.5 tonnes per hectare, "a result above expectations".
Protein levels ranged from 9.7-10.2%, which Mr Fleischer termed a "good result", with screenings "alright".
In Denmark, yield estimates range from 5.8-6.6 tonnes per hectare.
"There were very happy faces amongst the maltsters and brewers on our tour," he said.
Trading house Evergrain, which attended the tour, raised to 1.28m tonnes, from 667m tonnes, its forecast for Denmark's exportable surplus of malting barley, and lifted to 423m tonnes, from 194m tonnes, its estimate of the Swedish surplus.
Prices to fall further?
Indeed, there is some expectation that malting barley prices might fall further yet, although Mr Fleischer cautioned against expectations of a drop in the premium much below E20 a tonne.
"We have already come down a long way.
"While we have in the past seen the premium fall to E5-6 a tonne, we are unlikely to lose more than a further E5-8 a tonne."