CONCERNS over grain quality have seen a $15-20 a tonne price rise in malt barley prices over the past fortnight.
ABB cash prices for malt have risen from $173/t on November 11, to $188/t this week, while other marketers, covering stock shorts, are reported to have lifted their prices by more.
The spread between malt and feed segregations is out to $35-45/t, and analysts believe it could hit $50/t.
Feed values have held steady, with reports that domestic end user interest keeping dragging cash prices up to around $130-140/t delivered site through the Wimmera-Mallee region in Victoria.
The market is being driven mainly by domestic matters, with prices trading above export parity.
GrainCorp barley trader Stuart Clarke said it had been an unusually quiet harvest selling period, with many farmers unhappy with the low barley prices.
"Farmers are preferring to market their wheat and canola first and sit on their barley, meaning there isn’t much happening in terms of sales," Mr Clarke said.
He said the market was acutely aware of the potential for heat damaged grain to come in from South Australia and Victoria, meaning malt may be hard to come by.
Early reports from the Mallee in Victoria suggest there is some malt around there, but further to the south, most early samples are reporting small grain size.
In South Australia, it is a similar story, with early barley going well, but crops through the lower Yorke Peninsula and the south-east are an unknown quantity.
Mr Clarke said that farmers with Feed 2 or lower quality grain would be able to find a market to sell into.
"It will find a home somewhere, with a lot depending on the dairy industry in Victoria," he said.
"Pellet manufacturers and those using hammer mills can make use of high screenings barley, so long as the test weight is OK, but roller mills cannot, so there is less of a market than for Feed 1, but there is still a market out there."
Mr Clarke predicted a continued domestic-driven market over the coming weeks, and said with stocks in tight supply, there may be occasional price spikes as traders look to cover short-term shorts.
With further rain events predicted across key barley areas in SA and Victoria later this week, it is expected trade will again be slow until at least late next week.
