Grain Snippet: Barley Softens as Global Feed Grains Rebalance
Barley prices have continued to cool across southern Australia, with bids slipping to around $290 per metric tonne (MT) in Adelaide’s Outer Harbour and $304/MT in Geelong — declines of $17/MT and $11/MT respectively over the past month. The slide reflects improved grower confidence and increased selling as seasonal conditions firm. Meanwhile, earlier drought premiums have steadily eroded, pushing local values closer to export parity. It comes as global grain markets ease back toward more “normal” rhythms, following several years of black swan events including COVID, the Black Sea conflict and global inflation.
Global feed grain prices on a free-on-board (FOB) basis have been under pressure from record global corn crops and a long-term downtrend in US corn futures. Markets which previously carried drought premiums — such as Ukrainian corn and Australian barley — are now grinding lower, while exporters with stronger output like Black Sea barley, US corn, Brazil and Argentina have seen prices weaken from April through July before being pulled higher by a recent short-term rally in corn futures. This has narrowed spreads between major exporters.
Black Sea barley has shown the sharpest upside, up US$26/MT since late June to US$221/MT, driven by firm Chinese feed demand alongside weaker Russian and Ukrainian production amid lower-than-expected yields. Ukrainian barley remains elevated at US$216/MT, above its own feed wheat. Australian values have softened and now sit close to French barley. For corn, US FOB values have risen from US$193/MT in late June to US$205/MT on strong export demand and easing South American harvest pressure. Brazil and Argentina have tracked this lift, while Ukrainian corn — still the world’s priciest — has begun easing as new supply comes online.
USDA forecasts show global barley production steady m/m at 101.9MMT, still 3.26MMT y/y. Ukraine’s barley crop is estimated at 5.3-5.7MMT, which is lower y/y on reduced area, though exports are forecast to improve 40% to 3.2MMT which counters limited domestic use. The EU is expected to lift barley use in feed rations thanks to ample supply, though corn remains dominant. Canada’s 8.2MMT barley crop will likely compete with corn and DDGS (Dried Distillers Grains with Solubles) in feedlots, potentially limiting barley’s market share. Collectively amid the major exporters, global barley stocks-to-use remain tight.
Corn production among major exporters is forecast at a record 673MMT, an increase of 53.8MMT (8.7%) y/y. Ukraine’s crop has been revised lower m/m to 32MMT on the poor yield reports, but this production forecast remains 19% higher y/y, with exports projected at 25.5 MMT. The US is expected to produce a record 427MMT, dramatically lifting ending stocks despite stronger demand. Brazil sits at 135MMT for the current crop, and 131MMT for 25/26. The net increase in global feed grain production is keeping a lid on local barley prices as harvest continues.
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