The rain delayed harvest and the resultant quality issues dominated the market during August. Whether it was the lower protein and Hagberg falling numbers of milling wheat or the weathered appearance and pre-germination with malting barley, there were challenges. The good news was that all of this meant the quality premiums for both improved considerably. The downside is that inevitably we have more feed grain to contend with, especially wheat.
My comments in July that the Russian closing of the corridor had frightened the market, creating an opportunity to sell into a rising market for a change, proved to be prescient; it enabled feed wheat sales to be made well over £200 ex. It has since fallen some £30 on the futures market, which ought to be enough for now. The optimistic pre-harvest guesses about the total UK crop are unchanged, but the effect of weather inflicting sprouting and low bushel weight could still mean a reduction in the overall crop size.
Spring malting barley is a mixed bag. The earlier sown in the south has produced some good sized barley, with nitrogen usable, but some has very low nitrogen. Export malting barley has to be a minimum of 1.52 nitrogen, so some careful blending will be required when shipping.
This year is the complete obverse of last year, where everything was sound and combined in good weather. This time barley can seem to be ok as far as nitrogen, germination, retention and screenings go, but the inevitable weathered barley is where the latent problems are. While sprouted, split or skinned barley is easy to identify, pre-germination is not, and requires a proper laboratory check.
It may be that the domestic maltsters will relax their specification when they realise how much pre-germination barley is out there. For export buyers, fusarium is the problem. They don’t like to see pink, orange or black fusarium because it causes problems in the malting and brewing process which results in “gushing”. That’s when you take the top off a bottle of beer and it fizzes and shoots everywhere.
Because of the secondary growth, barley with green, immature grain needs to be dried carefully, maybe twice if it’s very wet, and then conditioned on a drying floor, where the grain should shrivel up. These can then be cleaned out, along with any split grain or other discoloured small grains. So, wait until the barley has settled down and dried before having it sampled for sale.
Our big competitor in European export malting barley, Scandinavia, has had a worse time than the UK. It planted later, then had a drought. Its barley so far has nitrogen and pre-germination problems, so the jury is out on what they will have available for export. Malting premiums are historically very high, but that’s because of the uncertainty over quality. It’s not because of consumer demand. Brewers are reporting lower beer sales for this year so far, but that’s not surprising, with some of the poor weather we have had. So, they won’t buy malt or malting barley for the forward months, yet.
Some things never change! Russia and Ukraine are still shelling each other’s port facilities and even grain ships. All this means is that there is an ever growing volume of wheat and barley trapped behind this Black Sea port “dam”, waiting to engulf the spot feed export market at some stage! Some of it will find a way out via the Danube or Baltic sea ports, or even across country; it’s just a question of when and how much.
Germany, France and Central Europe will also be short of milling wheat, but their feed is now being offered into our traditional homes in Ireland and Spain. Meanwhile there are still question marks about the wheat supply from big players like Australia, India and Canada. It may be a case of cashing in some of your milling and malting, when you know you have the quality, while playing the long game with your feed grain.
Lastly, the notorious hedge funds have maintained their short position on the world wheat futures market, so they are still betting that the Black Sea wheat will resume flowing again in volume soon.