Feed grain prices have been percolating higher this summer due to tighter supplies and increasing ethanol demand. Canadian barley production will be down sharply from 2009 due to lower seeded area. Industry sources estimate that barley acres could be the lowest in 30 years. Corn acres are expected to the second largest on record but growing export demand along with increased ethanol production will keep the 2010-11 carryout level historically low. The feed grain markets appear to be incorporating a risk premium due to the uncertainty in production. Extreme temperatures during corn pollination could result in extreme volatility later in summer.