World events and higher energy costs are pushing markets around but one grain stands out as a consistent commodity in demand by producers and consumers.

Barley prices are reflecting strong export demand, with China the key destination.

According to traders, the disruptions of market access for feed grains to markets in the Gulf States and North Africa has seen shipments of barley and corn diverted to Chinese ports.

Quotes for BAR1 grade barley delivered to buyers in Melbourne and Geelong have remained firm since the Iran war began, lifting $12 a tonne to $346 a tonne. Barley prices in Victoria and South Australia have been trading at similar levels to AGP grade wheat for the past two months.

Demand for barley in NSW and southeast Queensland are dramatically greater, with bids for barley warehoused in northern storages between $14 a tonne and $17 a tonne higher than last week.

While higher road and rail freight is a factor, these regions have soil moisture levels within the lowest 10 per cent of historical records.

This year’s rainfall to date sits at 40 per cent of the average in many areas.

Supporting this barley demand is the record number of cattle on feed and the lack of competitively priced sorghum.

More Chinese demand has pushed up sorghum prices to $363 a tonne on a Newcastle port basis, $23 a tonne higher than H2 grade milling wheat.

The pull for barley into northern markets is evident as the Port Kembla price for barley is $23 a tonne higher than the Geelong price.

A greater area of barley is expected to be sown this coming season due to the reduced dependency on high analysis fertiliser and some promising new-crop prices.

According to traders, current crop markets are restrained by ample global stocks but the oil crisis is expected to see greater impact in new-crop markets.

New-crop BAR1 grade barley on a Geelong port basis is bid this week at $319 a tonne, $12 a tonne higher than the price for prompt transfer.

A rush for the security of the US dollar has seen the Australian dollar fall to a seven week low, supporting canola prices.

Higher diesel and freight costs are being negotiated for some contracts entered prior to the attacks on Iran.

In some domestic farmer to farmer trade, the counterparties are equally sharing the rise in the cost of freight.