Malting barley prices relatively stable after a second leg up

August 24th, 2010 - In the latest edition of July 14th, we wondered whether the first leg up in the malting barley market would be sustainable and whether a second leg up could follow. New crop malting barley traded in those days at a level of Euro 170 FOB Creil.

The market has clearly made a second leg up since. This is mainly caused by the extreme drought in Russia / Eastern Europe and the following announcement of Mr. Poetin to restrict the export of cereals. In fact, exports by Russia is likely to be replaced by imports of cereals by mainly Ukraine and Kazakhstan. This will certainly have an impact on the world demand and supply situation. The market has reacted directly and supported by wheat we have seen price levels for malting barley of Euro 225 FOB Creil.

After the second leg up the malting barley market eased somewhat and is relatively stable now in the range from Euro 200 to Euro 210 FOB Creil. However, sellers are not easy to find and the rather bad weather circumstances during harvest in Germany / Scandinavia may turn out to be a new incentive to push the market higher.

For the coming period the downside potential appears to be limited, with wheat and feed barley values acting as a support. Furthermore, the premium of malting barley against feed barley is still considered to be historically low.

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The above information is for general purposes only. Any reliance you place on the given information is therefore strictly at your own risk.

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