MarketsFarm — International demand for Canadian feed barley has been strong thanks to a 2018 growing season drought in Australia that limited exportable supplies.
China purchased nearly 950,000 tonnes of Canadian barley in the first seven months of the 2018-19 year, significantly above the five-year average.
However, feed markets in general are quite sluggish ahead of spring planting season. Lethbridge’s Feedlot Alley is currently bidding about $250 per tonne delivered for May-June feed barley contracts.
“At this time of year, there are quite a few fat cattle leaving yards,” said Brandon Motz of CorNine Commodities at Lacombe, Alta. “That takes out quite a bit of consumption.”
Supplies are strong due to a relatively smooth-sailing springtime, he noted.
“We haven’t seen any spring issues like we’ve seen in other years, like spring moisture or struggle getting inventory into bins. That helps keep prices under wraps. There’s plenty of supply; bins are full.”
In February, buyers rushed to buy grain to cover during spring seeding and road bans. That caused prices to spike, according to Nelson Neuman of AgFinity Inc. in Edmonton.
“It seems like prices took the staircase up, and the elevator down,” he said.
Due to a lack of foreign appetite for Canadian canola, experts surmise farmers may turn to barley over canola when making seeding decisions this spring.
“Acres will increase up to 10 per cent for barley,” Motz predicted. “It’s a little early to call, but we’ll see more barley acres than in the past.”
As the U.S. National Weather Service’s Climate Prediction Center recently reported a 65 per cent chance of a weak El Nino prevailing throughout the springtime, it’s possible that wetter weather is coming to some areas of the Prairies.
However, a weakening El Nino leaves room for other weather systems to come into play.
“Weather is a very key factor,” said Motz. “If we remain dry, we could see a bounce in prices. If we get snow and we aren’t able to get grain loaded, we could see a bounce again.”
— Marlo Glass writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.