There are a few things at play in the international feed barley market that may help drag Aussie values higher over the next couple of months. The main one being the pace of Aussie exports. To date around 6mt of barley has been booked for export. With around 12.7mt of barley grown last year and around 35% of that making malt standard that leaves around 8.25mt of feed barley.
Granted some of the malt barley is being shipped as feed barley into the likes of Saudi Arabia but it does still indicate stocks will become very tight over the next 60 – 90 days if the current export pace is sustained. Domestic consumption is roughly 1.1mt of malt barley and 2mt of feed barley. It’s not rocket science to see that if the increased demand from SE Asia continues plus Saudi sales, Australian carry over will become very tight prior to the new crop harvest.
Looking at values out of other major exporters like Canada we already see feed barley values ex farm southern Alberta pushing higher overnight. Feed barley there is actually now trading at a significant premium, up to C$45, to even durum wheat. With the Russian export tax now effectively increasing feed barley prices out of the Black Sea and Canadian values very firm in comparison to Australian values there is no reason why export orders for Aussie feed barley will slow down unless prices here move significantly higher.
Local feed alternatives such as wheat are already pushing upwards of AUD$300 XF LPP while F1 is struggling to push above AUD$250 ex farm LPP. There is no potential alternative to cap a rally in F1 prices.
It appears that the Chinese import bans on Australian barley have done nothing but increase Chinese prices and shorten their supply.