1 MMT Balry carryout

[rain]

Charlie I was reading today that you think barley may be as low as 1 MMT. Thats kind of scary.

[charliep]

In my opinion, July 31 barley are most likely to be around 1.5 to 2 MMT. The job of the market this year is to ration demand to make these numbers happen. This rationing includes importing corn (as a note there are some new challenges/risks on this front around starlink), include as much feed wheat as possible in rations and force the livestock industry to reduce numbers.

I always have to keep in mind that this inventory has to carry the livestock/processing industry for Aug./Sept. when new crop 2003 supplies become available as well as necessary inventory for seed and feed kept of for security purposes headed into 2003/04.

Weather next spring will have a lot to do with inventory. Increased acres/rain next that indicates large production/feed security and I think you will see inventories go to the low end of this range. No rain/lots of production risk and I think inventories could approach closer to 2.5 MMT - people will hold.

Over the coming year, we will have to watch the demand side (livestock numbers/domestic malt industry). I don't think the primary industry should under estimate the damage that is currently being done to your customer base. They may not be here next year.