Tightening feed barley supplies in Western Canada have end-users looking to alternatives, with cheaper U.S. corn imports likely to keep a lid on prices.
“Barley stocks are tight, so the market is trying to ration the amount of barley being used and it’s doing a pretty good job of that,” said Jim Beusekom of Market Place Commodities in Lethbridge.
Feed barley is trading at $260 per tonne in Lethbridge’s Feedlot Alley, which compares with feed wheat at $255 and corn imports from the U.S. also at $255. Deferred delivery into the spring and summer has barley in the $265 per tonne area and up, while corn remains at $255.
“So the market signal to feed buyers is to switch to a different commodity,” said Beusekom.
He expected the trend would continue through the end of the crop year, “and then we’ll see what the reset looks like once we get into the new crop.”
Agriculture and Agri-Food Canada currently predicts record-tight barley ending stocks for the 2018-19 crop year of only 900,000 tonnes. The market analysis branch forecasts increased barley acres and production in 2019-20, but the actual size of the crop remains to be seen.
However, “bullish old-crop doesn’t mean much when it comes to new-crop,” Beusekom cautioned, adding that “barley has a tendency to make some big swings (in price).”
— Phil Franz-Warkentin writes for MarketsFarm, a Glacier FarmMedia division specializing in grain and commodity market analysis and reporting.