The rainy weather is pushing prices for wheat and summer barley in Europe upwards. The continuous rain of the past weeks has led to a halt in the grain harvest in the highlands and northern Europe where harvesting was not finished before.
The rain has soaked the mature grains still standing in the fields, resulting in black mold and sprouting. Although the extent of the damage is not yet clear, market participants fear a partial crop failure and thereby a shortage of the commodity.
Malting barley and bread wheat are particularly suffering from the current weather conditions. If the wheat no longer possesses bread quality due to poor falling numbers and gluten content, or if the germination capacity of the malting barley is compromised, or if mold infestation is too high, the commodity can only be used as animal feed or may even become considered as special waste. Consequently, prices for these types of grains have rebounded from their lows a few weeks ago and have already risen in the low double-digit percentage range.
The purchasers of breweries, who had been waiting in anticipation of further declining malt prices for 2024, were mostly caught off guard and are now attempting to limit potential damage. The rising demand in the malt market, combined with the hesitant supply of malting barley from farmers, cooperatives, and grain traders, is artificially driving malt prices upwards.
Winter grains, which were harvested several weeks earlier, mostly arrived in good quality and sufficient quantity in storage, and are therefore only indirectly affected by this price surge. Even the corn, which matures much later, was not damaged by the rain, but on the contrary, could even benefit from the precipitation.
The ultimate presentation of the overall grain balance will now depend on the weather in the coming weeks.
