Barley shows upside as harvest is held up

Harvesters went hard early last week, to minimize the impact of the rain delay, so there was still plenty of grain delivered to Graincorp according to their Monday harvest update. Figure 1 shows NSW still delivered 250,000 tonnes, well down on the 979,400 tonnes received the week before.  There is still plenty to go in southern NSW when it fines up again.

In Victoria, the rain came later, with sites receiving nearly as much as the previous week.  The timing of the rain has interrupted what is typically a period where harvest ramps up.  Victoria is likely around halfway through harvest, and looking at the forecast it might be a week before they are back into it.

It has been largely steady as she goes for the week on the price front, although Barley looks to have found little support.  Per Figure 2, Barley is showing some strength after harvest pressure saw prices ease around $20 over the previous month.

Export demand for barley is good, and we can see this playing out in WA with prices stronger than at Geelong.  Domestic barley consumers are only paying what they have to in order to compete with export markets, which is slightly higher now in the last week or so.

Figure 3 shows just how much impact the opening of the Chinese market has had on the Barley market.  After trading at a $50-$100 discount to US Corn Futures for much of the last two years, this harvest barley is holding a $50 premium. 

Figure 3 also shows that unfortunately for Barley growers, corn has fallen over the past six months, and absolute prices are not much more than they were last harvest.