(Resource News International) — Barley bids in Western Canada have seen a small improvement over the past couple of weeks, an increase associated with the price climb in other commodities and ideas that 2009 barley acres will be reduced.
“Some of the price hike can certainly be traced back to the general upward price move by all commodities recently,” said Mike Jubinville, an analyst with ProFarmer Canada in Winnipeg.
Also helping to generate some support for barley is the fact that area to the crop should be down, not up, this spring, he said.
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Poor price returns for feed barley in Manitoba and Saskatchewan and the fact there are disease issues such as rust to deal with, should result in barley area being down, said Bill Craddock, an independent trader and producer in Manitoba.
“Right now the initial price for producers in Manitoba is just over $1 a bushel, and considering the yield potential in Manitoba and eastern Saskatchewan is well below that of Alberta, it really doesn’t pay to grow the crop,” he said. “A crop like oats will earn a better return that barley will.”
Part of the problem, Craddock said, is that all the end-users who require feed barley are located in Alberta.
Jerry Klassen, a wheat trader and market analyst estimated that producers in Canada would seed 8.9 million acres to barley in the spring of 2009, which would be down from the 9.476 million acres forecast by Statistics Canada in April and the 9.357 million seeded in the spring of 2008.
Jubinville said prices for feed barley in the cash market are unlikely to climb significantly despite the drop in seeded area, given that supplies of old crop barley heading into the new crop year will be plentiful.
“End users are just not concerned about the supply of feed barley at this stage of the game, as the poor old crop bids and the lack of new crop offers reflect that,” Jubinville said.
End users of western barley are believed to have covered their commitments over the past couple of weeks, with coverage now believed to be to the end of June, possibly into the middle of July.
Cash bids for feed barley delivered to the elevator in Saskatchewan, based on Prairie Ag Hotwire data, currently range from $1.36 to $2.77 a bushel, in Manitoba around $2.97 and in Alberta from $2.68 to $3.74.
Cash bids for feed barley delivered to the elevator in Saskatchewan at the beginning of May ranged from $2.50 to $2.77 a bushel, in Manitoba from $2.52 to $2.83 and in Alberta from $2.36 to $3.59.
