Feed barley values seen ‘popping’ in January

CNS Canada –– Western Canadian feed barley prices remained firm to start the year, with bids having enjoyed a gradual rise from the $190 per tonne range in late November to the current level of $210 per tonne.

“Bids have firmed up, not surprisingly it’s kind of popping in January,” said Allen Pirness, a trader at Market Place Commodities at Lethbridge, Alta.

Wheat has been a strong market as of late and barley has just kind of followed suit, he said.

The 2014-15 crop year saw a sharp reduction in barley production across Western Canada, with Agriculture and Agri-food Canada predicting ending stocks by July 31 of just 700,000 tonnes, in sharp contrast to the 2013-14 carryout of over one million tonnes.

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“Barley is bullish by itself with low acres, but if some of this higher-quality feed wheat hits the market, that could check barley in a hurry,” said Pirness.

U.S. corn has also ceased to be a feed option for many producers moving forward, he added.

“The idea of replacement corn gets further and further away as corn rallies and the Canadian dollar falls,” he said.

Cheaper gasoline has also started to impact the barley market in an indirect way. Last year, Pirness said, some trucking companies were forced to park some vehicles due to a shortage of drivers, many of whom found jobs in the oil and gas sector.

But with the plunging price of crude oil dissuading many Alberta energy companies from operating at full capacity this year, more trucks seem to be on the road, he said.

“You know there’s barley and wheat from Saskatchewan that’s making its way into southern Alberta again fairly regularly. I think that could be measured as an effect of the oil thing,” said Pirness.

Going forward, he expects values to remain firm.

“(It doesn’t) really look like anything should go down at the moment. The Canadian dollar is weak.”

— Dave Sims writes for Commodity News Service Canada, a Winnipeg company specializing in grain and commodity market reporting.

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