(Resource News International) — With a late harvest across Western Canada very probable, cash barley prices have been growing stronger.
Toby Torkelson, general manager of RayGlen Commodities in Saskatoon, said barley prices have been moving in the right direction.
“We’ve seen cash bids increasing on a fairly linear pattern,” he said. “I think that’s based on the increasing corn values, the recognition of the short harvest we’re looking at, and the late maturity of that crop.”
And there isn’t a lot of barley out there, he said, with only seven million acres seeded throughout the Prairie provinces.
Demand has been strong from both malt and feed buyers, Torkelson said, as both markets realize there won’t be a lot of extra product, and there are question marks regarding the late harvest.
“Maltsters are trying to buy up as much as they can get their hands on, recognizing that the quality is very unstable with the barley crop,” he said.
Further west, Dave Guichon of Ag Value Brokers at Lethbridge said feedlots in that province have not been a big factor in the market’s growth.
“As far as the feedlots go there is very little activity, as there is very low volume; demand is low right now, which is normal,” Guichon said. “Cattle aren’t really coming in, and the calf run won’t start until October, so that is normal.”
There is also high demand for dried distillers grains (DDG), a byproduct of ethanol production, from the U.S.
“We keep hearing we are going to (see) stronger competition than we’ve ever seen from DDG,” he said. “We’ve been approached by a lot of trucking companies looking for product to backhaul when they are bringing DDG back into Canada.”
One thing both observers could agree on was the shortage of barley in Western Canada.
“We’re short barley if you look at the (supply and demand figures). We’re probably short a million tonnes,” said Guichon.
Torkelson echoed that statement. “The crops in southern Alberta look to be very good. But it’s hard to argue with the numbers; there isn’t a lot of barley in the ground.”
Manitoba’s cash barley price topped out at $3.18 per bushel, Saskatchewan’s top price was $3.10, and Alberta’s was $3.59, according to a release from Ag Prairie Hotwire.