Stable but Cautious: Barley Market Assessment Amid Global Supply and Weather Uncertainty

The Barley market continues to navigate a landscape shaped by steady prices, regional supply dynamics, and evolving weather conditions in key growing areas. Over recent weeks, prices on both the SFE (Sydney Futures Exchange) and physical spot markets in Ukraine have displayed notable stability, with minimal volatility and virtually unchanged daily closes. However, beneath this calm surface, market participants remain vigilant. Global inventories are balanced to slightly weaker compared to last year, mainly due to lower harvest estimates in parts of Europe and ongoing logistical challenges in the Black Sea region.

Meanwhile, feed barley demand remains steady across the livestock sector as cost-conscious buyers seek alternatives to more expensive grains like corn and wheat. Looking forward, the interplay between new crop prospects and weather-driven yield risks will be critical. A moderate El Niño event and dry spells in Eastern Europe, particularly Ukraine and Southern Russia, warrant close monitoring as these could impact yield potential and export availabilities into late 2025.

📈 Prices: Barley at Key Exchanges and Physical Markets

Exchange/Market	Contract/Category	Location	Price	Currency	Closing Date	Weekly Change	Market Sentiment
SFE	Jul 25	Australia	310.00	AUD/t	2025-06-13	0.00%	Stable/Neutral
SFE	Jan 26	Australia	315.00	AUD/t	2025-06-13	0.00%	Stable/Neutral
Physical	Feed, 14% moisture	UA (Odesa) FCA	0.24	EUR/kg	2025-06-12	0.00%	Stable
Physical	Feed, 14% moisture	UA (Kyiv) FCA	0.23	EUR/kg	2025-06-12	0.00%	Stable
Physical	Cattle feed	UA (Odesa) FOB	0.21	EUR/kg	2025-06-12	0.00%	Stable

🌍 Supply & Demand Drivers

• Steady Physical Demand: Feed barley consumption in the EU and North Africa remains robust, as buyers opt for cost-effective rations amid volatile corn and wheat prices.
• Stable Export Flows: Ukrainian origination continues, though Black Sea logistical risks persist. No meaningful price change suggests balanced stocks and demand for now.
• USDA & Local Crop Forecasts: Most recent USDA and EU Commission reports indicate a slightly reduced barley output for Europe in 2025, primarily linked to weather and reduced acreage in France and Spain.
• Speculative Positioning: Managed money is largely neutral in global barley futures, reflecting the market’s wait-and-see attitude.

📊 Fundamentals & Comparison to Last Report

• Production: Australia remains on track for a strong 2025 harvest; meanwhile, Ukraine’s 2025 spring barley area is marginally down, but weather remains the primary X-factor.
• Stock Levels: End-of-season stocks are adequate but not excessive across the EU, Black Sea, and Australia.
• Comparison to Last Report: Price and sentiment are unchanged; last report highlighted similar themes—steady prices, modest supply concerns in the Black Sea, and stable global trade flows.

☁️ Weather Outlook & Yield Risks

• Eastern Europe: Short-term forecasts show below-normal rainfall and above-average temperatures across much of Ukraine and Southern Russia, increasing yield risk as the crop enters critical development stages.
• Australia: Mostly favourable conditions, though some regions face patchy moisture deficits which could impact late-planted barley.
• EU: Drought is receding in Northern Europe, but persistent dryness lingers in Spain and Southern France.

🌏 Global Production & Stocks: Key Exporters & Importers

Country/Region	2024/25 Production (mt)	2024/25 Stocks (mt)	Comments
Australia	12.3	2.1	Strong harvest, trend yield
Ukraine	6.6	0.8	Uncertain due to weather/logistics
EU	52.5	4.5	Mixed—drought risk in South
Russia	19.8	1.3	Average crop expected
China	6.0	n/a	Largest importer
Saudi Arabia	n/a	n/a	Largest feed barley buyer

💡 Trading Outlook & Recommendations

• 🟨 Maintain Neutral/Watch: Stable prices and balanced stocks suggest a neutral stance for now.
• 🌦️ Monitor Weather Closely: Any further drought or extended heat in Ukraine/Black Sea region could tighten supplies and spark price volatility.
• 🧳 Buyers: Consider forward coverage for Q3-Q4 2025 if weather risks intensify in the Black Sea/EU.
• 🌏 Sellers: Strong Australian outlook offers hedge opportunities—watch for any upside in global demand, or risk-off on supply shocks.

📆 3-Day Regional Price Forecast

Exchange/Market	Forecast 1-Day	Forecast 2-Day	Forecast 3-Day	Trend
SFE (Jul 25, AUD/t)	310.00	310.00	310.00	Stable
UA Odesa (EUR/kg, FCA)	0.24	0.24	0.24	Stable
UA Kyiv (EUR/kg, FCA)	0.23	0.23	0.23	Stable