Grain Snippet: Barley Market Balanced, but Weather Risks Building
Barley markets are heading into the 2026/27 season with a fairly balanced outlook, although weather risks are becoming more important, most notably for Australia’s east coast. Global supply is still comfortable after a strong 2025/26 production year, but the market is no longer trading purely off large balance sheets. Delayed Canadian seeding, NSW dryness, elevated fertiliser costs and ongoing Chinese demand are all lending price support.
Globally, the European Union remains well supplied. EU barley production for 2025/26 is forecast at 56.34MMT, up 5.9MMT y/y, with ending stocks estimated at 7MMT. Looking ahead, 2026/27 production is forecast to ease to 53.1MMT, largely due to yields normalising rather than a fall in planted area. Crop conditions remain broadly favourable, with French barley rated 76% GD/EX, above last season’s 69%, although weather will remain important through the next month.
Canada is a bigger watchpoint. Statistics Canada is forecasting 2026/27 barley production at 8.4MMT, down 1.4MMT y/y, despite seeded area rising by 124kHa. Seeding progress is sitting at just 3.6%, well behind last year’s 19% and the five-year average near 12%, due to cold and wet conditions. While there is still time to catch up, a shorter growing window could limit yields and increase risks to quality later in the season.
Broader feedgrain markets are weighing on sentiment. Brazil’s 2025/26 corn crop was revised 3MMT higher to 135MMT. The US corn planting is 59% complete, broadly in line with last year and slightly ahead of average. With record US corn production of 432MMT in 2025/26 and carry-out at 54.4MMT (up 2.8% y/y), the wider feedgrain balance remains heavy.
China remains the key barley demand driver. China’s 2025/26 annual barley imports (from all origins) were revised up to 11.5MMT, 1.25MMT higher y/y, supported by strong buying and firm feedgrain demand. Imports are forecast to remain solid at 10.5MMT in 2026/27. That demand remains important for Australia, as Chinese buying continues to support export parity, basis and domestic values, particularly through export-focused port zones. Between Oct to Mar, Australia accounted for ~ 58% of all of China’s barley imports.
Domestically, Australia remains well supplied after a record 2025/26 barley crop of around 16.3MMT, up 23% y/y. However, strong exports and lower carry-in stocks have absorbed a large portion of this near-record supply, with ending stocks forecast at 1.4MMT. Australian barley exports from October to February reached 5.2MMT, up 1.5MMT y/y and above the five-year average. This has also helped keep the APW1–BAR1 spread historically tight, reinforcing barley’s relative strength against wheat.
For 2026/27, Australian barley production is forecast at 14.1MMT, down 2.2MMT y/y, mostly due to yields normalising after last season’s exceptional result. Nationally, area is expected to rise to 5.1Mha (up 6.9% y/y), with WA barley area near 2Mha, (up 7% y/y).
NSW is the main risk for Australian barley, with dryness expected to reduce production by around 1–2MMT y/y. NSW can contribute anywhere between 0.9-4.2MMT to the national barley balance sheet, depending on the season. If northern and eastern supply tightens, grain may need to move interstate into deficit zones, which can strengthen domestic basis and support values in SA and VIC.
Longer-range forecasts pointing to a potentially drier finish through late winter and spring will also be watched closely. Elevated fertiliser costs remain another important factor, as lower application rates are likely to trim yield potential this season.
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