East Coast barley prices came under pressure as farmer selling picked up into a market as buyers eye-off another thumping harvest.
An abundance of natural pastures and the absence of export buying from China have significantly eroded demand for Australian barley in recent years.
Two years of drought through 2018 and 2019 forced farmers to feed barley to keep livestock alive. In many cases farmers were forced to buy in supplies at a crippling cost. This was reversed in 2020 as record high barley yields filled on-farm storages to the brim, offering an abundance of supplies for the domestic feeders.
The situation was further complicated in the south. An absence of export demand from China left Victorian farmers looking for new overseas buyers to absorb excess supplies from last year's bumper crop.
Southern Queensland barley bids slipped as farmer selling in NSW picked up to make room for another massive harvest. Old crop barley prices fell $5 to $295 delivered into the Daring Downs last week. New crop barley prices into the Downs were steady at $270 a tonne.
Southern barley markets also came under pressure last week on tepid export demand. Solid early season export demand has eased in recent months as Saudi Arabia's nearby needs were covered. Increased export demand from Asian buyers, such as Thailand and Vietnam, has helped to fill some of the export void, although volumes are small compared to China and these markets are very price sensitive.
Domestic buyers have boosted barley inclusion levels in feed rations as they take advantage of the attractive prices relative to wheat. Even so, higher usage rates by feedlot, poultry and pig industries is unlikely to absorb last year's bumper east coast barley crop.
Feed buyers are already looking ahead to the 2021 barley harvest which will become available in October. Australia is on track for another huge barley harvest in 2021 which is tipped to exceed 11 million tonnes. East coast barley production is expected to approach 4.5 million tonnes.
Global grain markets remain volatile. United States grain futures markets surged higher last week as hot, dry weather across parts of North America cast doubts over yields and production estimates. North American grain farmers are saying a heatwave across the Unites States and Canada will slash grain wheat and corn yields.
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