Feed barley holds firm despite macro pressure from wheat and oil slump

Feed barley prices are holding largely steady on the forward curve, with only mild weakness on the most deferred deliveries, as broader grain and energy market pressures weigh on sentiment but strong export demand for Black Sea wheat limits the downside.

Barley is currently trading sideways in a relatively illiquid futures environment: nearby and new-crop feed barley contracts show unchanged closes, while only far-deferred positions edge slightly lower. At the same time, a sharp drop in crude oil after de-escalation in the Persian Gulf, a stronger euro and rising Russian wheat exports are pressuring the wider grains complex. EU yield expectations for 2026 soft wheat are slightly below last year but still above the five-year average, while US wheat exports are running well ahead of a year ago. This combination caps barley’s upside but also anchors prices through ongoing feed and export demand.

📈 Prices & Term Structure

The feed barley futures curve (AUD/t) is flat in the near and mid-term, with only slight softening further out:

Contract	Close (AUD/t)	Approx. EUR/t*	D / prev. day
May 2026	312.50	≈ 189 EUR/t	0.00 (0.00%)
Jul 2026	316.00	≈ 191 EUR/t	0.00 (0.00%)
Sep 2026	316.00	≈ 191 EUR/t	0.00 (0.00%)
Nov 2026	316.00	≈ 191 EUR/t	0.00 (0.00%)
Jan 2027	321.00	≈ 194 EUR/t	-1.00 (-0.31%)
Mar 2027	321.00	≈ 194 EUR/t	-1.00 (-0.31%)
Jan 2028	337.00	≈ 204 EUR/t	-3.00 (-0.89%)
Jan 2029	337.00	≈ 204 EUR/t	-3.00 (-0.89%)

*EUR/t figures are indicative, based on an assumed FX rate and rounded.

Physical Ukrainian feed barley offers (EUR-based) underline the generally stable tone:

• FCA Odesa feed barley: around 0.25 EUR/kg (≈ 250 EUR/t), flat since 20 March after a small uptick earlier in the month.
• FCA Kyiv feed barley: around 0.23 EUR/kg (≈ 230 EUR/t), unchanged through March.
• FOB Odesa cattle-feed barley: around 0.18 EUR/kg (≈ 180 EUR/t), oscillating narrowly but broadly stable.

🌍 Macro & Cross-Market Influences

Barley is trading against a backdrop of notable macro and cross-commodity moves. A de-escalation of tensions in the Persian Gulf—after the US president extended an ultimatum on reopening the Strait of Hormuz—triggered a roughly 10% fall in crude oil prices, weighing on commodity markets in general and trimming inflation and biofuel risk premia in grains.

At the same time, a weaker US dollar and stronger euro are pressuring European-origin grains in export channels. This currency move erodes euro-area price competitiveness and helps explain the lack of upward momentum in barley, even as physical values in the Black Sea remain well supported.

📊 Supply, Demand & Wheat Linkages

Barley remains closely tied to wheat fundamentals in both feed rations and trade flows. Russian wheat exports continue to run strongly: March shipments are now projected at around 4.2 million tonnes, well above February and sharply above March last year. Firm wheat export demand is keeping FOB prices at Russian ports stable, despite the broader commodity pullback, and this indirectly underpins feed barley values in competing origins.

Within the EU, first official yield projections for 2026 soft wheat indicate average yields of about 5.98 t/ha, 5% below last year but 2% above the five-year mean. For Germany, yields are also seen slightly below last season yet marginally above average. While barley-specific figures are not yet available, this pattern suggests overall cereals supply near or a touch above trend, limiting the scope for a pronounced barley rally unless weather turns significantly adverse.

On the demand side, US wheat export inspections recently exceeded market expectations and are running around 18% ahead of last year in cumulative terms. Stronger wheat offtake into key destinations such as Mexico, China and Taiwan supports global feed grain flow and indirectly constrains barley downside, particularly where barley competes as a substitute in feed rations.

🌦️ Weather & Crop Outlook (Key Regions)

Weather risk premium in barley is currently modest, reflecting early-season conditions in major cereal areas that are generally close to average. With EU yield guidance already near trend and no acute stress flagged, the market’s primary focus remains on macro and trade developments rather than on immediate crop threats.

Nonetheless, as spring progresses, any shift toward sustained dryness in the Black Sea or northern Europe—or excessive moisture hampering fieldwork—could quickly reintroduce weather risk into barley pricing. For now, the flat futures curve signals that participants see limited near-term threat, but are beginning to price slightly higher uncertainty into the far-deferred contracts.

📌 Trading Outlook & Risk Management

• For feed buyers: The current flat to slightly soft curve and stable Ukrainian physical values offer an opportunity to secure a portion of Q3–Q4 2026 needs. Consider layering in coverage rather than frontloading, as macro headwinds (oil, FX) still bias prices mildly lower.
• For producers: With deferred contracts only marginally above nearby levels and some downside risk from macro pressure, using forward sales or hedges on the 2027–2028 strip may be prudent, especially where production costs are already locked in.
• For traders: Monitor the wheat–barley spread closely. Strong Russian wheat exports and firm FOB wheat prices are supporting barley on the downside; any softening in Russian wheat demand could open the door to a relative barley underperformance.

📆 3-Day Directional Outlook (EUR-based)

• EU feed barley, spot (CIF main consumers): Sideways to slightly weaker in EUR/t terms, reflecting a strong euro and broad grain softness.
• Black Sea feed barley, FOB: Largely stable in EUR, anchored by competitive freight and ongoing demand in MENA but capped by cheaper Russian wheat.
• Barley futures (EUR-equivalent): Narrow daily ranges expected, with volatility mostly driven by moves in crude oil, FX and wheat benchmarks rather than barley-specific news.