Malting barley climbed above 300 euros ($427) a metric ton for the first time ever in Paris trading on concern drought in France will reduce the harvest of the grain used to make beer, whiskey and food.
Barley for delivery in November, after the next harvest, surged 13.50 euros, or 4.7 percent, to 303 euros a ton on NYSE Liffe. Malting barley for delivery next year and in January 2013 also gained.
France produced 10.2 million tons of barley in 2010. The country’s farmers face increasing restrictions on water use amid a drought that has left soils in the northern half of France the driest in 50 years, according to the government.
“The situation in malting barley is the most worrisome, and possible defaults of delivery should already be integrated into the strategies,” Agritel, a Paris-based farm adviser, said in a report today. Liquidity in the market “unfortunately” is “inadequate to manage this problem,” it said.
The number of outstanding contracts for November-delivery malting barley, the most active contract, was 1,613 at today’s close, compared with 189,824 contracts for November-delivery milling wheat traded in Paris.
Malting barley futures started trading on NYSE Liffe in May last year, while wheat has been traded in Paris since 1999.
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