CNS Canada –– The feed barley market is in the middle of its seasonal slowdown.
While demand should pick back up in the New Year, the prices might not have much room to the upside, given ample feed wheat supplies.
“If you didn’t look at the calendar, you could still guess it was December,” said Allen Pirness of Marketplace Commodities in Lethbridge.
“Bids have backed off and cattle feeders are covered through December,” he said, adding that farmers are also reluctant to sell at these levels and are now waiting for 2015.
Looking into the New Year, there are cases to be made for both higher and lower barley prices. By themselves, the supply/demand numbers for barley look bullish, said Pirness, pointing to this year’s smaller crop.
However, there are other options for livestock feeders and ample feed wheat supplies could displace barley in rations, he said.
At the same time, some line companies were also showing an increased demand for feed wheat in localized areas, which could limit how much eventually makes its way into domestic feed channels.
Current prices see both feed barley and feed wheat bids at around $190 per tonne into southern Alberta, said Pirness. Feed barley had been as high as $205 per tonne only a couple of weeks ago.
U.S. corn and DDGS could also make their way into the Canadian livestock market, but the weak Canadian dollar was limiting any of that movement for the time being, he said.
Solid off-shore demand for DDGS had also led to some situations where U.S. buyers were looking to buy back and divert shipments that had originally been destined for Canada, Pirness noted.
— Phil Franz-Warkentin writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.