Market signals barley, pulses, oats, canDia and triticale by Trevor Day Chairman, Australian Grain Marketing Federation

Barley market 2001-02

While we supply a reasonable proportion of the feed barley, Australian malting exports are so large that, in a typical season, we will supply in the order of half the world malting trade.

In Australian dollar terms, there has been a more or less steady decline in malting barley prices, whereas feed barley prices have not shown quite the same trend. Both have dipped quite sharply since January, however, for which a significant factor is the appreciation in the Australian dollar.

(Also) the malting market has clearly been impacted by uncertainty in China about the quality of some barley that was being supplied from Australia:

  • some feed barley supplied for malting uses
  • other low-quality malting that was mixed variety.

This has caused some loss of confidence, which means that the buyers hold off and only purchase what they need immediately.

We have al so seen extra competition with new exporters of Australian barley from Victoria - seeking sales by offering malting barley at a discount to prices being offered by ABB and GPWA through Grain Australia.

Barley outlook 2002- 03

Setting the opening pool indicator for a crop that hasn 't been planted yet, and will not be completely sold until the year 2004, involves a great deal of skilled crystal ball gazing!

Barley Market 2002/03

  • Northen Hemisphere production rise
  • Potential for another large Australian crop
  • Pressure on press, esp Malting
  • Sloop Malting $215-$225/t
  • Feed barley $155-$165/t
  • Very early - much can change

Outlook for lupins

A key issue is the availability of other protein stocks, soy meal in particular. Soybean production has steadily risen and this abundance of cheap protein has held international lupin prices down.

Lupin Outlook 2002/03

Market Factors

  • US/ South America soynean production
  • Demand for vegetable proteins on the back of feed and food safety scares
  • Exports look negative
  • Eastern Australia domestic market

There is international demand for vegetable proteins on the back of feed and food safety scares which will use some of the increased soybean production, but the overall international outlook for lupins indicates the current low prices will continue.

The domestic market remains quite strong on the back of low production along with higher field pea and canola prices.

Outlook for oats

Oats Outlook 2002/03

  • US have allowed pre-clearance of Australian oats but difficulties still remain
  • Eastern Aust domestic market strong
  • Production will rise internationally & within Australia
  • Prices will respond to increased production

The international oat situation has been very strong, due to production being very low in key areas of the US and Canada.

One of the issues for the year ahead will be the US market as a destination for Australian oats, with quarantine issues continuing to hold up this trade.

We can expect increased sowings in response to the strong oat prices both offshore and within Australia.

Internationally prices will probably be around US$10- 15 below feed barley.

Outlook for canola

High international prices and relatively low stocks have resulted in edible oil demand shifting from canola to soy oil and palm oil, which is creating some downward pressure on prices.

We would expect canola plantings to increase in Australia, and they have already elsewhere in response to last season's good prices.

Canola Outlook 2002/03

  • High international canola oil prices-demand shift to soy& palm oil
  • Production response to high price, but ...
  • Dry weather in Canada, US & South America may limit production
  • Chinese import rules affecting GMO soybean imports may provide opportunity for Australian

Overall, we expect slightly lower prices for 2002-03.

Other grains

Canola Outlook 2002/03

  • High international canola oil prices-demand shift to soy& palm oil
  • Production response to high price, but ...
  • Dry weather in Canada, US & South America may limit production
  • Chinese import rules affecting GMO soybean imports may provide opportunity for Australian

Field pea - Above $300 is unlikely at this stage. Good production of peas in Australia and Canada and local production in India will probably see prices decline for the remainder of 2002.

Faba beans - Overall, we expect similar prices for 2002-03 if harvest is reasonable.

Triticale - In the absence of downgraded wheat, we ex pect prices to trade at a $10-15 discount to ASW wheat. If there is a large supply of cheaper feed barley, however, this discount could be greater.